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

To: Jack Jagernauth who wrote (10071)	1/20/2000 10:37:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hey Jack, I've been selling into the GENE rally that's taken the stock from $3-$4 in early December to its current $23+. Most of the folks on the GENE thread are new to the stock and are attempting to ride the momentum crest in BioTech going on right now. Since I've done that form of short term trading, I can fully understand what they are doing and understand the rapture that comes with quick profits and limited risk of going back to cash. However, in the case of GENE, we never knew when the sun was going to shine on this stock. The risk there for me was in missing the opportunities as they have come along. The GENE chart would have driven most momentum players to the other end of the field! GENE has had periodic spikes only to then spend the next 18 to 24 months in a slow painful decline. If one didn't sell into the rallys, then there'd be no down-side protection, no purchasing power, etc. On the other hand, if one sold out of this stock completely on the first pull-back, the chart will tell you that there would have been some severe "missed opportunities." With such a tiny company like GENE, it's not possible to get a good concensus opinion on earnings, growth, etc. Also being primarily a research and developement company, one never knows when they're going to strike a new vein of gold. If you were to look at my current AIM charts on GENE, you'd probably notice a couple of things. One is that I have a ton of money tied up in a tiny little outfit. Remember, however that I've been AIMing GENE for longer than I've been using AIM!:-) I first bought shares of GENE (then CRIC) back in 1985 or 1986. I averaged down using my "pre-AIM" methods which weren't all that different from Mr. Lichello's, but not as structured. There have been enough cycles over the 15 years of ownership that I'd built up a sizable inventory in the warehouse. Other things you would notice is that I stage the AIM buys on GENE over an extended time frame. This stock's past "slow fade" share price fooled me back in the '80s, so now I'm very slow to repurchase shares. I keep very high SAFE values on both sides and then extend the time between purchases to usually only one per month and sometimes one per quarter. Now, the company is growing and its collaborations are improving with each new contract. Will this Slow Fade syndrome continue? I can't say. What I can say for sure is that GENE has added a tremendous amount to my net worth in the last month. I now have nearly 50% more cash on hand for that account than I had in TOTAL VALUE in the Shares just 8 weeks ago. And STILL I have plenty of shares in inventory. If I get up the nerve, I'll put the GENE history up on the web site. I almost hate to as it could be very misleading to newbies. Six months ago the stock was a break-even one in my account and now it's showing 700+% gains. I wouldn't want anyone to think that this is the way it always works! These seeds were planted a very long time ago and just finally germinated in the last month. I've been harvesting as the price has grown and taking profits. I've also been "cheating" AIM with its informed consent along the way. Again, since I'm not a newbie to AIM, I take liberties that would give Mr. L ulsers!!! :-) It is my opinion after years of investing for my own account and those few fiduciary accounts I've managed that there's greater risk in being out of the market than being in it - IF ONE HAS A GOOD BUSINESS PLAN IN PLACE. AIM's still the business plan that is in force for my account. It has been for 12 years now. Hope this helps, Tom

To: Jack Jagernauth who wrote (10071)	1/20/2000 6:50:00 PM
From: fuzzymath	Read Replies (1) \| Respond to of 18928

Jack, yes, I made a quick small profit, and that's the way my system works. But, I think the AIM strategy is less nerve-wracking -- I have to watch the market closely every day, because getting out a day late can easily wipe out those little profits. For short term trading, I don't know if there's a reliable indicator that would let you sell on the upstroke and buy on the downstroke. That would be perfect market timing. The AIM strategy, however, compares values across different types of investments. Since you're doing comparisons of long-term investments, making a move on a particular day isn't critical. You can look at the relative values of your investments, prune those that appear the most excessively high, and buy something that appears low. It's a kind of value-oriented asset management, and that kind of strategy has made a lot of people rich (including people like Warren Buffett, if I'm not mistaken). I don't have my trading rules posted, and for this reason: my methods are essentially skimming methods. They rely for success on small moves in the market. If a fair number of people knew the exact equations, and if some of them worked for big investment companies, and if those companies started trading using the rules, then I'm pretty sure the entire system would stop working. Just like, if it was determined that 100% of the market's gains came on Wednesdays, that would end as soon as lots of people knew about it, because then all short-term traders would buy on Tuesday (raising Tuesday's closing price) and sell on Wednesday (lowering Wednesday's closing price). Kevin