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

To: Bernie Goldberg who wrote (10410)	3/9/2000 12:59:00 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Bernie, Going back to Barry's original note, you'll notice he said that the time frame was not of concern. He was only analyzing what AIM would do with $0-1/8 price declines, no matter how long it took for those declines to take place. I think you may have missed this point. Barry was looking at the increment of trading, not the frequency. It was his belief that without some minimums for trading being used, AIM was going to buy too many times over the course of a long decline by eighths. He then added some artificial barriers in the form of minimums for trading and the number of trades decreased and the increments between trades started to increase. In your example, you are assuming that no trading is done until a period of time has passed and then AIM buys exactly what is requested at that time. It assumes that the price has declined further than what would be needed to generate an order that "only" satisfies the minimum requirements. As your example shows, sometimes it's prudent to let the clock run in between trades and not be too anxious to buy more. In this way your Cash Reserve is put to better use and lasts longer. This gives the benefit of more interest earned, and a better average cost per share. Since none of us has the perfect crystal ball, we do not have a way of seeing into the future. I guess if we did, we wouldn't need AIM at all! So, we have to come up with a method of utilizing our Cash Reserve in a proper way for our circumstance. For instance, I'm much more willing to buy back shares of BMY than I am GENE, even though GENE has recently made me more money. Why? because GENE is a Research and Development company involved in the study of the human genome, doesn't currently make any money, and has just $24 Million in sales. This makes it quite different from BMY which almost always makes money, has a long list of winning products and is a huge company by comparison. To apply exactly the same rules to BMY and GENE would be a financial and fiduciary mistake. Each company has a personality of its own as do the types of individuals that would own their stocks. Most folks who own BMY wouldn't think of owning GENE and visa versa. Robert Gammon, who will be presenting his paper at the AIM meeting treats his account (a retirement holding) differently from what I do. He'll show that frequent trades in a tax exempt environment with a fixed annual cost of trading works very well. Different methods seem to work with different individuals. It's the results that matter. I like the idea of some "competition" here on the BB. We know there are several of us that own the same stocks. We may not all have the same starting points, methods or total values, but we all sort of fall into the same rhythm of buying and selling, even if our price targets are different. SoCal Steve and I have many times been trading the same stocks and get a kick out of who just "bested" the other. This is good. There's sometimes a fine line between "Missed Opportunity" and "Best Execution." I rarely change a GTC order price just to "assure" I get my trade done. It hurts to have the price come to within an eighth of my strike price and then move away without my order being filled. It also hurts to buy or sell too soon and leave opportunity on the table. It's a tough balance to maintain. Experience with each stock is still the best teacher on this. Thanks for the time you spent on the examples. It helps everyone here to look at those and see what AIM's all about. In this world of instant gratification, sometimes the hardest thing for any of us to realize is that *TIME* can be one of our best allies. Best regards, Tom