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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: tekboy who wrote (40932)4/1/2001 8:38:10 AM
From: Larry Grzemkowski   of 54805
 
Hi TEKBOY

Here is my attempt at trying to explain the risk management that AIM offers. I started AIMing in late 1998, and made some good profit as did anyone in 1998 but the stocks I was invested in where not that exciting (MPS as one example).

I got interested in the Gorilla Game in November of 1999, read the manual and listened to all the good folks on the thread. Toward the end of November I switched my accounts over to Gorillas and Kings. The one thing that always bothered me was the valuation of these stocks but they were the stocks that moved and they seemed to move straight up. I can remember YPEG ratios of 5 and 7 for some of these stocks during this time. So I became a LTB&H investor.

Then up until March 2000 came we were all happy and then the bubble burst. And that is when we all started to say I should have known better and taken some money off the table but when should I have done that I don’t have a crystal ball.

You see that is what AIM is all about it is automatic. AIM sells stock when they are high flying and then tells you to buy shares back when everyone else is selling and you get those shares at a discount. In other words Buy Low and Sell High.

In my next post is a chart (I just can’t seem to mix charts and test and get it right) of the stocks I held in November 1999. This chart shows what the AIM and Buy and Hold return would be as of April 2001. It also shows the percent cash that is left in each account (for AIM) and the percentage increase in the number of shares you now hold (because of AIM) as of April 2001.

As of right now I am still invested in all the stocks in the chart except CTXS. I made a lucky guess (declining revenue growth) and got out at the right time. My returns are not as good because after the bubble burst I went to 60% cash around July 2000 and got back in and began AIMing again in October 2000.

So right now I have more shares than I did in October 2000 but I am out of cash. If I had started AIMing in November 1999, I would be setting with plenty of cash to buy cheap shares.

BTW I was able to do these simulations with a program called Position Cost Averaging which does AIM simulations and can be found a Stocksystem.com.

Hope this helps explain how AIM works.

Larry G
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