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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 (14661)	1/29/2001 12:58:19 PM
From: labestul	Read Replies (2) \| Respond to of 18928

Hi Bernie, As I read your last post #14661 I detected a tone of anger. If I am mistaken I apologize. If indeed you were angered it may have been that you somehow interpreted my prior post as a criticism of your statement. Let me first clarify that I was in no way trying to contradict what you said. I was simply trying to inject another viewpoint for consideration and your prior post seemed a suitable venue from which to begin. In particular I was not trying to imply that what you stated was in any way contradictory or inconsistent with Lichello's book. In fact such a thought never crossed my mind. In any event, if you took offense I apologize for no offense was intended. I do however disagree in part with the following statement of yours ... Mr. Lichello's book. It explains in very simple terms, perhaps too simple,what the function of Portfolio Control is as well as how it performs that function. I disagree with your apparent implication that Lichello's book completely describes the portfolio control or for that matter the whole AIM mechanism. Lichello designed the AIM mechanism and he presented it in his book. He also tried to explain it in his book. While the AIM mechanism was presented in its entirety the explanations provided were not necessarily correct (although I do not dispute them) and they were most certainly incomplete. This is because the AIM mechanism is in fact a very intricate sophisticated mathematical mechanism. It is impossible for anyone to completely understand such a mechanism even its originator. This statement has been true since time immemorial for all mathematical mechanisms. Therefore if I or anybody else makes a statement about the portfolio control or any other aspect of the AIM mechanism, that statement may or may not be correct. However, the mere fact that Lichello doesn't mention it does not necessarily make the statement incorrect. Anyway my statement about the Portfolio Control was simply thrown out as an example of the many things which the portfolio control encompassed and which is consistent with my basic philosophy of AIM. Please note this is my philosophy ... not necessarily Lichello's ... and not necessarily the philosophy of any other AIMer. The only purpose of my prior post was simply to provide an alternative viewpoint based on that philosophy which is: AIM is a volatility capture tool. It is not a risk management tool. As it happens of course, AIM does a superb job of risk management but that is merely an extremely fortunate side effect. This philosophy leads me to the opinion stated in my previous message which is that I view the portfolio control merely as part of the formal AIM mechanism. I consider and control risk based on the total value of the AIM account and the portfolio control has nothing to do with it directly. Of course indirectly the portfolio control can be considered as a measure of the current amount that one wishes to actually have invested in the stock. This is consistent with how most AIMers view it I think, and I certainly don't disagree with this viewpoint. All I am saying is that I don't view it that way at all. And if this viewpoint were in contradiction with Lichello (and I don't believe that it is) then Lichello would be wrong in this case because such a viewpoint is equally consistent with the AIM mechanism. Barry