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Strategies & Market Trends : Charts With An Attitude; Trading In & Out

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To: OldHack who wrote (4055)11/25/1997 5:01:00 PM
From: Linda Kaplan   of 4701
 
OH,

You're uncanny. Tonight will be a difficult night to sleep.

I will be happy to tell you all about AIM and yes, you don't need that program for AIM. I'll email, but in general, it's a system for managing volatile long term investments that maximizes safety as well as gains, based upon a theory described in a book by Robert Lichello. VLSI has been a model stock for this system.

There is a site that Tom Veale runs that gives examples with pictures. He has tweaked the system. It doesn't help you select stocks but helps you manage them once you've chosen.

You decide how much you're allocating to that investment, how much you're willing to risk, and set aside a percentage of that cash for cash reserve. Plunk the rest into the instrument. Based upon a formula, you buy more as the stock goes down, sell off some as the stock goes up. The funds for buying more comes from the cash reserve. The funds obtained by selling off some goes into the cash reserve! Tom has devised the Idiot Wave to determine degree of market risk and how much should be in the cash reserve. If it's at that percentage you don't have to sell any more as it rises, for a while.

You end up with more shares but are keeping some of the cash in a money fund, safe, during much of the time.

There are various refinements.

This is Tom's site:

execpc.com

This is Tom's weekly newsletter:

execpc.com

This is Tom's stock example:

execpc.com

This is Tom's mutual fund example:

execpc.com

Linda
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