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

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To: OldAIMGuy who started this subject	7/14/2000 10:13:46 PM
From: B. J. Barron	Read Replies (2) of 18928

Thanks for the great post on how to handle cash for mulitple positions. It is a classic and goes into the ole AIM folder. Watching the aim video tape made me also think about using PCA(what a great presentation), but having just gotten free of the realtime monitor for to many hours a day and to many years, I decided that all I would do is become a testing junkie and loose what I have just gotten back. Re buying the highs, I have often done that when trading a Relative Strength strategy with momentum stocks. The secret was to have very tight stops because nothing will save you from the morning gaps downward that you cant get out before time. I agree with Bernie, that if your time is long enought and you keeping buying the down trend(that is if it doesnt go to zero) you eventually will come out ahead but it can be painful on the psyche. In late 80s I was all into global investing and especially caught up in how great Japan was. I finally bought into the Japan Fund ( a Scudder open end type that held the 10yr return record)within a month of the top of the market and then dollar cost averaged monthly for the next 1 1/2 yrs. I never guessed that the buble had broken and kept thinking this was just a short term correction and all would so be well in the land of the rising sun(what great timer i would make>>). What all this taught me very slowly was, that if you DCA into a slowly declining mkt like Japan in 1990, you can keep from loosing your shirt. But the key was you cant stop till it stops and again that can be psych. draining. Finally, there was a 10 or 15% rally and I actually got out with a small profit. What was interesting to me is that each month durning the downward move i would be either up a little or down a little. Now all this, is to say that with time and a rally eventually i think DCA and AIM can get you out of some troubling positions. But it would be lot easier to not buy the 52 wk highs and have to do all the waiting. I prefer a strong company that has recently crashed on fear etc that was not justified by the fundamentals and long term outlook for the company.Right now Qualcomm come to mind...enough...bj

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