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

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To: Bernie Goldberg who wrote (14655)	1/29/2001 9:19:51 AM
From: matvest	Read Replies (2) of 18928

Hei Bernie, Thanks for the alternative suggestion. I do recall Mr. L. suggesting that if one stock tanks, instead of buying that stock you could buy another. But doesn't this cause an undesirable weighting problem? For example, say I put 5,000 in Stock A & 5,000 in cash reserve. Stock A is selling for 10 and so I have 500 shares. Stock A drops to 5 & I have a buy order for 500 at 9 which I decide to not execute and change to stock B which is a $15 stock. If I understand correctly I would buy $500 worth of stock B or 33 shares. So now I have 500 shares of A worth 2,500 and 33 shares of B worth 495. All future trades will be based on stock B, but I only have 33 shares to work with and the portfolio is heavily overweighted toward stock A. What's wrong with this picture? Larry M

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