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Strategies & Market Trends : A.I.M. PIC List (Perverse Investment Candidates)
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To: OldAIMGuy who wrote (43)6/8/2001 1:33:35 PM
From: rgammon  Read Replies (1) of 127
 
Tom, Bernie
The PIC list is a near ideal combination of growth companies (what we want in our portfolios) and value investing (growth companies at bargain or near bargain prices. What we are seeing today with the PIC list is a time of extreme turmoil in earnings projections.

The caution we should observe with the High Growth Stocks List is whether in the current environment something has changed that dramatically changes the growth prospects. Intel, for example, dropped off the list because ValueLine reduced their earnings projection (less than 13% for the next 5 years). The Semiconductor Industry Association has a market growth of about 20% dialed in for 2002. Unless the CPU market grows dramatically less than the overall chip market, or if the growth estimate is significantly high, then Intel should return to the HGS list in 6 months or less.

A similar sort of at least minimal analysis should be performed before selecting a stock on the PIC list or either buy n' hold, or AIM. Particularly if they drop off of the HGS list, we need to pay close attention as to why. There MAY be a rationale for selling the stock/terminating the AIM at that point. Even this step needs to be taken cautiously since we may have cases like Intel above.

Robert
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