RE: AIM Entry Points
When we discuss the Lichello model, yes we can have an opinion about when is the right time to start our AIM investment. However, when we discuss REAL stocks, they only match the model to a limited degree, if at all. Therefore, this reality instructs us to pick our stocks for AIM very carefully, using much the same criteria we would use with buy n' hold selections, cash flow, debt, sales growth, markets, Price/Earnings, and a whole host of other criteria to help reassure us that we understand what the company is doing, what its future prospects are, and what its management are thinking/doing.
There are LOTS of examples out there of stocks that have gone into the toilet, with no recovery (or little recovery) back to former levels, although in the IBM example, management did repair the damage and the stock recovered to former levels (although that may not have helped those IBM'ers who were planning to retire or did retire when the stock was well over 100, only to see it swoon down to the low 40s - I remember this swoon and the commentary in the papers over the retirees' fate).
Not every stock is a good AIM stock. Some are downright bad ones. Reverse Splits can sound the death knell. I did a simulation of Electronic Arts when it was a NYSE stock of the period leading up to the reverse split and on to the termination of its listing on the NYSE. There was NO recovery of this AIM prior to the de-listing. We can all think of other examples of stocks that have sunk into obscurity and disappeared.
Robert - Mr AIM Aggressive |
