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

To: OldAIMGuy who wrote (12679)	9/2/2000 10:45:02 PM
From: JSLyons	Read Replies (1) \| Respond to of 18929

Thanks, Tom. My AIM plans are slowly taking shape, at least in my mind. The BB seems divided on one important and fundamental point: GTCs vs by-the-clock portfolio management. Tom makes a good point when he says he sets a GTC at a sell point that was considered acceptable when the purchase was made, ie he sets a goal and collects the cash if/when he hits it. Others prefer once or twice a month. It occurs to me, without any empirical data to back it up, that the latter approach could allow for better results in today's momentum driven tech sector and would filter out the bumps. Here's an example: KLIC tanks on fear of push-outs, bringing it to our hypothetical buy point in a flash. In my experience over recent years, this is more common than many suspect. Just in the last quarter, ATMI gapped up 20 percent in one day after getting crushed 2 weeks earlier. AYST rebounded from 18 to 27ish in short span. In the case of KLIC above, the GTC sell order kicks in and we're done. But the stock keeps dropping over the next days. What to do? Wait a bit until setting another buy, as Tom does? Sell more? Option B: We trade on set day(s) of the month, say the 1st and 15th, or the first and third Wednesday, or whatever. If KLIC tanked well ahead of our next update, we're likely to get a much better entry point from AIM as shares head lower after the first sharp sell-off. (I have yet to see a one-day rebound, except in the Emulex fraud case and such.) Taking this further, one could see where once a month would outperform once every two weeks by allowing for fewer trades (lower transaction and perhaps tax costs) but greater swings in price between trades, ie you're buying more at even loer prices or selling more at even higher prices than the original target. This might also address the debate on SAFE settings; less need to tinker... One other thought: I am leaning, against the prevailing wind, toward grouping my 4 chip-equip stocks into a single AIM basket. The sector tends to move more or less in tandem, the 4 represent different parts of the fab process -- front-end, back-end, supplies/materials, etc. And I like the idea of having some flexibility in which equity to buy or sell when AIM flashes a signal. Slings and arrows welcome... Jonathan