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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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To: aptus who wrote (15519)4/5/2001 7:51:13 AM
From: labestul  Read Replies (1) of 18928
 
Hi Folks,

I'm back!

I just returned to New York after a three week trip to Bali, Indonesia, then to Manila, and Finally to Seoul. If I add the frequent flyer miles to my trip from New York to Las Vegas ... will I qualify for the greatest distance travelled award???

Seriously though I returned to find over 250 new messages here. I have just read them all although some of them I plan to re-read more carefully. I am particularly interested in the discussion related to how to begin AIMing a stock which we currently own but which has a (possibly significant) loss.

After reading and thinking about this I may have further comments to make however for the moment here (for what it's worth) are my initial comments:

(1) Mark has identified the two main approaches to this which he labels Bernie's and Tom's. He further states that he "leans towards" Bernie's approach. Finally he makes the point that regardless of which approach is "better" (whatever that may mean) one should use the "better" approach regardless (or irregardless to use a popular non-word) of wether one is starting out from scratch or from a loss position.

I most certainly agree with this last part. I am not certain which approach is "better" but which one it is it is that approach which should be followed in both situations. As to which approach is "better" ... I too would have leaned to Bernie's although having read these posts I am not now completely convinced. I will think about it! This might make a very good discussion topic in Vegas.

(2) I will now describe briefly how I would start AIMing an existing stock holding. I do this primarily because nobody has addressed the relatively minor though theoretically important commission aspect. In my example below it is assumed that I do want to AIM the stock which I currently hold but am not yet AIMing.

First I would notionally sell all of my stock holdings at the current market value to produce cash. I say "notionally" because I would not do any actual selling at this point. I would just pretend to sell.

Second I would add any extra actual cash that I wanted to use to AIM this stock. I now have a theoretical amount of cash with which to start this AIM account.

Third I would determine what percentage of the total theoretical cash that I would want to invest in the stock at the outset. I would probably either use standard Lichello BTB settings or possibly the IW to do this.

Fourth I would notionally buy this stock and set the portfolio control equal to the amount of stock notionally purchased.

Fifth I would determine how much of my actual holding I would need to sell to achieve this target level (or alternatively how much more I would have to buy).

Sixth I would only actually effect this transaction if it met my minimum transaction size criteria. If it did not I would wait for the first AIM directed transaction which did. This is done in part to prevent commissions from being too large a portion of any individual transaction amount.

PLEASE NOTE: I am not necessarily recommending the above method. I am merely describing what I would have done before reading the above discussions. After I digest them, I might make another post describing how I would alter this method.

I am looking forward to AIM 2001.

See you all there,

Barry
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