AIM Questions and Answers Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : AIM Questions and Answers

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: OldAIMGuy who started this subject	7/23/2001 3:10:25 PM
From: fearghalmc	Read Replies (1) of 221

Hi Tom, firstly, let me thank you for providing a lot of information on Aim in your web-site. I have two questions which I really need to figure out. Can you help? 1) Why do we add 50% of buys to Portfolio Control. Why not 25% or 75% or 100%? 1a) It seems to me that 100% should be the proper number to add to Portfolio control as this keeps you more fully invested and helps prevent the investor from building up cash reserves unnecessarily. What are your thoughts on this? 2) Also, it seems to me that there is no basis for 33% or 50% cash reserve. The cash reserve should be determined based on the investors assessment of risk (e.g your IDIOT WAVE or maximum % decline in stock etc.) Assuming, that we have a reasonable basis for determining what the cash reserve percentage should be.....then why wouldn't we simply buy/sell to adjust out total portfolio to the appropriate cash/equity ratio that is consistent with our risk assessment. This bypasses the flaws in the "by the book" system. In fact, by using Split SAFE and Vealie's, aren't we in effect overriding the "by the book" cash reserve % based on our own risk assessment - so why not go the whole hog and just buy/sell based on what determining an preferred cash/equity ratio (e.g the % indicated by the Idiot Wave) One more comment. As I contemplate on building a modified AIM system, i think that Portfolio Control should be increased once a month by what I call the "MRF" (Minimum Return Factor). This represents what the investor needs as a minimum return (i.e his cost of capital plus inflation). By adjusting PC upward, once a month by MRF (of say 1% per month) we make less sell decisions and keep more fully invested. The by the book system does not account for inflation causing us to make sell decisions prematurely. Any comments on this? Thanks in advance, Take care and Happy AIMing Fearghal

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next