Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : GUMM - Eliminate the Common Cold -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (1462)	11/7/1999 11:54:00 AM
From: RFH	Respond to of 5582

Yes, Mike. You are absolutely correct. The AIM system lags the buy and hold investor when a stock takes off to the stratosphere. In fact, it seriously underperforms it. I feel, like many of those here discussing GUMM that a sustained rise is inevitable, and I will subsequently hold off on selling for the time being. (There is a method of incorporating this expectation into the "math" of the program itself). However, even though at one time I was the proud holder of over 2400 shares back in December of 1998, (the price at the time was around $6), there was no way to predict the price action we have enjoyed to date. Again, this trading method takes the emotions of fear and greed out of the equation, and if (God forbid) the price were to correct from here back to single digits, I would be buying again hand over fist! My trading of IIT, also on my web page, is a good example of a stock which took off from its lows around $4 to around $24, corrected to around $14 (where I was again buying) and is heading up again (hopefully). I started using AIM on IIT back in March of 1998 at a price of 14 1/8, and had I just held it, I would be close to even today. However, the program has me up over $17K as of Friday's close. I guess it's just a question of style and risk tolerance. (By the way, this account is in my IRA, so capital gains are not a factor). Thanks for your constructive criticism!! Sincerely, RFH elnet.com

To: Mike M who wrote (1462)	11/8/1999 12:35:00 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 5582

<Off Topic> Hi Mike, RFH's method of managing the risk of being involved with new technology seems to be a logical choice in the case of GUMM. We can assume that there may be a few lumps and bumps along the way to their ultimate success and making small incremental (and profitable) adjustments to his account seems to be prudent. It's not the same as "selling out" or "selling short", but just taking a few dollars off the table. It is more like "harvesting" than "slash and burn." One thing that isn't immediately apparent with RFH's short history is that there's interest accumulating any time the Cash Reserve is in positive territory. GUMM pays no dividend, so that interest helps to compensate that account during periods of inactivity. The AIM method never has one sell all the way out of an issue by itself. It maintains an envelope of risk no matter how high the price should ultimately rise. It uses the cash during market setbacks to expand the risk envelope, "rewarding" the user for good fiduciary management. Improvements to the AIM method have taken place to help it perform better with stocks with a positive slope to their trend line. Those improvements keep the cash portion of the account from becoming impractical. This was a shortcoming of the the original AIM algorithm. It would appear that there's not very many people on this thread that would fall into the "gray" area of opinion on GUMM! There's those that are very bullish and others that are bearish. Most don't spend much time describing why they have their opinions or what their own "business plan" for investing is. I think it was not only informative but generous of RFH to have shared as much information as he did. I guess we could say that RFH is more cautiously "bullish" than some others here. AIM's 20/20 hindsight works well with volatile issues. Sometimes much better than a 50/50 guess about the future. RFH has shown profitable results from staying with a plan through both thick and thin. This is very different than the very short term mentality of many on SI and certainly the YaHoo threads. It's not as extreme as either Buy And Hold or Short Term. Anything that modifies the Risk/Reward equation is going to have an effect on overall performance both short term and long term. In summary, those who bring good information and advice to the thread should be encouraged. Those that post only shallow comments don't really contribute anything. Keep up the good work. Best regards, Tom