A.I.M. PIC List (Perverse Investment Candidates) Message Board

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Strategies & Market Trends : A.I.M. PIC List (Perverse Investment Candidates)

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To: JSLyons who wrote (117)	1/26/2002 5:22:07 PM
From: OldAIMGuy	Read Replies (1) of 127

Hi JS, I agree that without volatility AIM's not much fun. :-) Most everyone attempts to find the ultimate growth stock. AIMers don't really need growth to have their investments work. I have found there is a correlation between growth and volatility. Generally the larger the growth rate, the more brutal the down-side is when a projection is missed. This is one of the building blocks of volatility. Another cause/effect point is that if earnings growth is being watched by lots of analysts, then there's usually a quarterly zig and zag that occurs right around announcement time. Yet another building block of volatility (and frequency). Not all growth stocks are volatile. Not all volatile stocks show growth. But there is correlation. As AIMers we want volatility. As investors we want Quality. The PIC exercise is attempting to satisfy mainly the latter. The Highest Growth Stocks (HGS) list in Value Line is an interesting hunting ground for potential AIM stocks. What's nice is that the BETA of each stock is also listed. The list is updated weekly on Page 39 of the Index and Summary section. Many years ago I used the list with a screen of 1.40 BETA as a lower limit for selecting stocks for AIM. This actually proved to be pretty good, too. It made no attempt to "time" the market. Just used the HGS's higher BETA stocks as fuel. This most recent exercise is designed to provide a point of entry that might avoid some of the tragedy that occurred during the 2000 Bubble and Burst. There's no reason not to further qualify any of these stocks as either good or mediocre investments. No need to not qualify them as AIM candidates either. It would be easy to qualify them just by looking at their various graphs. aim-users.com The ones that haven't traded much in a year didn't get much benefit from AIM. The ones that did trade did benefit! :-) I very much like what Don Carlson's been doing. He's been working hard. I hope he'll be available as one of the contributors at our next AIM meeting where/when it occurs. I also am quite fond of the semi-equip companies as you are. Unfortunately, I've not had much free cash in recent times to go start any new investments in that arena. The only one I do own actually doesn't make semi mfg equipment, but auxiliary stuff. CGNX. It's classified as a "Precision Instrument" company, I believe. However, it follows right along with the Semi-Equip companies on their roller coaster rides. It also happens to be a PIC candidate. With my personal AIM account in CGNX most of the profit shown in it has been generated by AIM. Only a small portion currently is indicative of the underlying security's growth. Yet it is a growth stock. Best regards, Tom

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