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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: steve in socal who wrote (8028)	7/29/1999 4:38:00 PM
From: OldAIMGuy	Read Replies (1) of 18928

Hi Steve, I noted this AM that Waterhouse just past the 2 million active account mark. That's a whole lot of folks! Have they moved all their money there yet? Probably not, but cash seems to be flowing in the way you've suggested. Institutions trade with the big houses and have deals to keep commissions very low. That and their "investment banking" business keep them going. If you look at the percent of revenues that comes from "retail" at the big houses, it's usually about 50% sometimes less. At a place like Waterhouse, it's more like 85%. What makes the "retail" brokerage stocks interesting to us AIMers is that when they fall, they fall like a scorched phoenix and smell worse than burnt turkey feathers. But then the world DOESN'T come to an end and they shoot back up like a shuttle launch from Cape Ken.... ah, er.... Canaveral. The big brokers are less volatile because of the lower percent of business that comes from the retail sector. So, the retailers are better AIM stocks generally. As AIM accounts they need FAT cash reserves, however. I generally use the IW's stock setting for them. Currently I own just one brokerage/investment banker - Hambrecht & Quist (HQ). That account is up 48% in just under one year. Cash reserve is currently about 41% of the total value. I've been considering starting another one with Waterhouse's stock now that it's off about 25% from its IPO price. Don't know what I'll do yet. SCH has been a great performer and would have given decent AIM performance as well. A "what if" example I've tracked in Newport since 1994 shows a 348% total return since then. Lots of "vealies" used along the way, too. Best regards, Tom

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