Q. (from an non-believer!)
Tom,
I was reading your description on CGNX. How did you buy 100 shares on
10/19/97 at 27.5 when that day was a Sunday? On neither the Friday before or
the Monday after did the price go anywhere near 27.5
Saul
A.
Hi Saul,
Sorry for any confusion. If you will note the dates on all of the trades shown, they are on Sunday. The program I use for managing my accounts is a weekly update and records everything as "Week Of" in its histories. My trade occurred during the week of 10/19 (Thursday maybe?). I very rarely buy or sell shares of the same issue more than once in a week, so this is fine.
I use the recommended trade prices in the program to enter 'good until cancelled' orders with my brokerage (Waterhouse's WebBroker, btw). Because they are 100 shares orders and because they usually sit awhile before filling, they tend to rise to the top of the pile at that price. Because the orders are on a gtc basis, I don't have to be sitting there watching the ticker all day. What fills does and what doesn't stays open. Very low maintenance!
I've used AIM for fully ten years and it has proved remarkably reliable. As you will see in the CGNX graph, it saved my rump and had me average down from my starting point of about $18 all the way to under $13. Then it built a comfortable cash reserve on the rise back into the $30s. I first bought at $18 after the price had fallen about 50% from its previous high. I thought that was a good price, and (given enough time) it was. Unfortunately, it wasn't the bottom! AIM helped me by using up a good portion of the cash reserve as the price continued to decline. AIM's done this on many of the stocks I own. I guess I think I'm a good bottom fisher, but the reality is that I usually buy in too early.
Thanks again for the question and again I apologize for any confusion. AIM usually doesn't do as well as Buy&Hold in the short term. It usually does a bit better than short term trading because it maintains a partial position in the issue as the price rises. It takes many market cycles to have AIM beat both Buy&Hold and ST Trading on a permanent basis. AIM's a long term method of risk managing a stockholding. It's best suited to stocks that have a very good 3 to 5 year potential, but maybe a few bumps along the way.
Best regards, Tom |
