My most successful AIM
accounts were purchases at the top of a move, and accumulation on the way down.
Then, the sky's the limit!
Still studying the book, but found this an interesting point. Has anybody done a study on a single stock to see whether AIM worked better if one bought in at the peak or at the trough? Should be fairly easy to do if you have a volitile stock--pick a high point and run a hypothetical AIM program, then pick a low point fairly soon thereafter and run AIM again, and see what happens. The discrepancy between a few months starting point shouldn't make that much difference, I wouldn't think, to the ultimate answer -- which got better results? If AIM really aims for high price buy-ins, it's going to throw ALL my investing principles out the window!
Second point: I haven't yet finished the book so don't know my opinions of AIM overall, but I CAN say that Lichello is pretty bad at calling the market generally. This is from the 1992 edition, pg. 82:
Such heady times [as the go-go years in which the market moves relentlessly up] are not likely to recur in the foreseeable future. The day of the easy quick killing is over. Cynicism and disbelief have come to dwell among us as house guests, and, well, they just feel comfortable here.
Hmm. Anybody remember what the Dow or NASDAQ were in 1992? Anybody think "irrational exhuberance" is compatible constitutes "cynicism and disbelief"?
Oh well, some of the best stock pickers have been lousy general market forecasters! |
