Hi JF, Re: AIM "popularity" or lack thereof.................
It was in 2008 that I'd had to discontinue AIM-Users.com as a personal activity. Issues unrelated to AIM as a portfolio management tool forced me to abandon it.
Not to pat myself on the back, but I'd started writing about AIM just after Al Gore invented the Internet. I do think that effort attracted previous readers of Mr. Lichello's book and gave each a place to continue learning AIM's application and share their experience. My personal AIM experience started in 1986 when I first read Mr. L's book. It happened that I decided to model my own portfolio as an AIM portfolio starting in January, 1987. I maintained this mock portfolio along side my own trade activity. (consider mine "shoot from the hip" management) As the markets rose during the first half of the year I actually did more selling than the AIM model. Then, when the markets started their downward slide, I was buying when AIM was sitting idle.
I had nearly given up on my 1 year AIM study at the end of September as I saw AIM as being too lethargic. Then October 19th, 1987 came to be. It took that disaster to drive AIM to finally open its wallet, let the moths out and start to spend money buying back shares. AIM spent pocket change while I ran around buying everything and anything I could for about a week. The markets didn't finally bottom until nearly two months later. At that point AIM was spending large amounts buying shares while I had only pocket change left to invest. Both AIM and I ran out of cash at the same time, but AIM had spent heaviest at the lows while I'd spent too much too early.
What did I learn? AIM looked for larger profits before selling and awaited far larger discounts before utilizing its precious cash reserves for reinvesting. It was a better salesperson and a better purchasing agent than my shoot from the hip activity. Further, 9 months after the market low, AIM would have proved to be far ahead of me because of its conservative trade activity.
In January of 1988 I converted my entire portfolio over to AIM's management. I've stayed with AIM ever since. It didn't necessarily make me more money than some other method, it just added consistency to my management of investments.
Around the time Mr. Lichello passed away we did collect as a group of AIM users - first in 2000 and then again in 2001. Both meetings were well attended (maybe 35 to 50 attendees) and both were held in Las Vegas. I'd offered up many different possible venues, but Las Vegas won easily. This may help to confirm your suspicions that many investors are closet gamblers at heart. Many of the early AIM users were actually attempting to systematize their investment "gambling" to add some smoothness to their performance. Others had serious "ticker addiction", not leaving their computer monitors at all during the trading day. They were looking for a way to break their compulsion. Many gained some measure of success but many more abandoned AIM from boredom.
A long time ago I took a class in high performance driving at Bob Bondurant's school. He preached "Smoothness, Consistency and Concentration" as the three things one needed to be a successful race car driver. I've found these three things help in many aspects of life and they also were just exactly what AIM did for me as an investor. My performance became much smoother, I consistently bought when markets were out of favor and it left me with time to concentrate more on stock fundamentals rather than some magical herd following concept.
So, as you suggest, AIM's boring aspect is really its most appealing function. My gun remains holstered until AIM tells me when to fire. I have had time to pursue many other activities because I don't have to be glued to a ticker service.
The AIM book was last updated just before Mr. Lichello died. It's no longer available new in print form. However, Amazon still offers it as an e-book for their Kindle readers. I agree this hurt AIM's potential to continue being "found." One author, Jeff Weber, has continued to publish AIM related materials. ( jjjinvesting.com ) He mostly adheres to Mr. Lichello's original ideas but concentrates on stock selection and portfolio building in his books. Recently he's started using AIM in conjunction with LEAPs which looks to have promise.
There are those of us who are too stubborn to give up our AIM activities, I guess. There's a reasonably active users group at Investors Hub ( investorshub.advfn.com ) that we've maintained. Back when it appeared Silicon Investor was going to disappear we migrated to Investors Hub.
The evaporation of commissions that seems to be occurring right now bodes well for all traders as well as AIM users. Further, as long as the tax laws still favor long term investing (12+ months holding) AIM will offer long term investors a tax advantage over short term trade strategies. My average holding period on a FIFO basis is about 4 years, for instance. "Free Commissions" and "Long Term Capital Gains" make this a nearly ideal environment.
Most people who've approached AIM and then abandoned it may have thought it was something other than what it is. It's a management method for inventory control. Instead of nuts and bolts, auto parts or plumbing supplies, I'm managing stock certificates. Our investments should be managed in a business like fashion. AIM does this very well.
I do think it is more labor intensive than sitting at a roulette wheel. Maybe it's the work and the lack of excitement that's the cause of its lack of popularity. Maybe if AIM made sounds like a Casino every time a trade was executed it would be more popular :-)
Best regards, Tom |
