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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: HighTech who wrote (8550)	9/18/1999 7:51:00 PM
From: LemonHead	Read Replies (2) \| Respond to of 18928

Assume further that it rose to $35 and back down to $21 before going back up to $40.. Am I correct in assuming that AIM would only have sold some thereby increasing cash reserve but since it never went below the PC, there would never have been a buy signal? I guess I'll be anyone. In this case if you started with $20, AIM Classic would have created another buy because you should have your first sell on the run to $35. This raises the buy and sell ranges which in turn would allow you that next buy at $21 on the return trip. Although I believe you are correct in thinking that your portfolio control would not be adjusted on the sell, it still raises the bar for both buy & sell and that movement creates the next buying position above $20. You will probably get many responses but I think as a beginner (FWIW) the worst thing you can do is to tweak the PC with no valid format (been there, done that). Let it change as the software dictates is my best advice. FWIW, I think this group is the greatest and It only gets better as someone like you gets involved and starts asking very good questions. Like singing a song, we practice over and over again till the melody is instinct. I would suggest that you get both available software packages ASAP (Newport & PCA). Set up several watch lists through different directories (this is the training wheels). Tom showed me how to do it with Newport, and I have six running. Set one up for yourself, set one for someone else (my most active watch list is JZGalt), set one up for equities you wouldn't buy and monitor the data. Some folks talk down on AIM because they feel it to simple to work, well it does work but it is far from simple. I just recently took of my training wheels (started in Jan.), but I have a ways to go before I know the whole song. Still trying to get in tune. (What's that melody in the back of my head? "What would you do if I sang you a song and dadadada dada got out of tune.., Oh I get by with a little help from my friends, Yea dada da from my friends") Is it Coker? First your hair & then your mind <ggg>. Keith

To: HighTech who wrote (8550)	9/18/1999 9:42:00 PM
From: Dataminer1	Read Replies (2) \| Respond to of 18928

HiTech, I plugged your example in a PCA. Started with 250 shares at 20. At 35, you sold 82 shares At 21, you bought 53 shares At 40, you sold 60 shares After these 3 trades are executed, you end up with 161 shares with an average cost of $5.22 per share. Not Bad. AIM profit is $5605 compared to $5000 for the buy/holder. It does not matter that the price didn't go below the original price of 20. Once the price had climbed enough and gone back down, you would get a buy signal. As LH stated, fooling with the Port. Control is usually a mistake, and should only be used in conjunction with a Vealie. A long time ago, I spent some time "tinkering" with the PC in a spreadsheet. I convoluted it all sorts of ways, and all sorts of bizarre things happened, none of them good. You will run out of cash or the compounding mechanism won't work properly. In the short run, it seemed to change the trading advice OK, but the effect over time is to completely screw up the whole thing. I know Tom has mentioned that he almost didn't want to include a PC adjustment in Newport, because of the "sensitivity" of it, and didn't want anyone to make the mistake of changing it unless they knew exactly what they were doing. We didn't include a PC adjustment in PCA for the same reason. There are plenty of other adjustments that will accomplish what you are trying to do. In the same example stated above, if I change the buy resistance to 0, AIM profit is $5924, and your average cost ends up at $4.58 a share. the trades are: sell 82 shares at 35 buy 70 shares at 21 sell 71 shares at 40 In conclusion, the worst thing you can do is fool with the PC unless it's for a specific purpose and you are very familiar with the effects. I have back-tested many many stocks, and can attest that adjusting the resistances, minimums, and cash levels are sufficient to provide flexibility. Hope this helps. D1

To: HighTech who wrote (8550)	9/19/1999 9:20:00 AM
From: Bernie Goldberg	Read Replies (3) \| Respond to of 18928

Hi, My problem was similar although not quite the same as your hypothetical situation. Bought 1300 shares of BEAM in early December 1998 $5.0625. Sold 100 shares 01/10/99 @6.1875 Sold 73 shares 03/21/99 @6.5625 Sold 400 shares 02/28/99 @10.625 Sold 53 shares 04/04/99 @10.9388 Sold 160 shares 04/25/99 @16.0625 Sold 55 shares 05/02/99 @17.875 Sold 59 shares 08/01/99 @24 Bought 40 shares 08/15/99 @17.9063 Bought 70 shares 08/29/99 @15.4688 You see even though the price is nowhere near the starting price of $5 you can still get buy signals. Both safes are set at 10. You could say that I am behind Mr. Buy and Hold but I would disagree and I will tell you why. I started off with $6581 invested in stock and $3418 in cash. Today I have $9800 in stock and $13000 cash. Because of the cash reserve I am receiving a dividend of 6.4% on a stock that does not pay a dividend. Since my original investment, Stock and Cash totalled $10,000 and I now have $13000 in cash one could argue that I was paid $3000 to purchase 510 shares of stock. At this point in time Buy and Hold would have a little less than $25000 but it all would be at risk. There would be no dividend of any kind. This stock could drop to $10 tomorrow. It could also go to $40 or $50. Nobody really knows. All you have to do is go to the Summit Technology thread here at SI and read some of the posts from both Bulls and Bears on this stock. There are many experts in this world. AIM wasn't invented for them. It's for the people who aren't afraid to admit that they really don't know where any stock or index is likely to be one or two years from now. Hope this helps. Bernie