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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 (15464)	3/31/2001 4:37:13 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Bernie, I think that no where in Mr. Lichello's book does he suggest that individuals start accounts in a losing situation. The AIM method of starting with one's cost and using AIM from that starting point guarantees that the very first Sell trade will have a LIFO profit. It guarantees that every Sell from that point forward will also have a LIFO profit. This is true even if the share price never returns to its original starting point. As you know, AIM functions to compound LIFO gains over time. It cannot be said that fiddling with Portfolio Control before ever starting the account up will do the same. If we started the hypothetical account up with the PC based at 1/2 the original cost and the stock were to rise first, then the first sale would be at a loss both LIFO and FIFO. This isn't acceptable as far as I'm concerned and isn't in keeping with anything Mr. Lichello said. In his Q & A session he never suggests that people take a loss to start an account. I think you are reading way too much into his comments. Remember that in such a situation as a Q&A session, answers aren't usually researched, but are given as general guidelines and opinion. I have far greater trust in Chapter 6 than in the Q&A sessions. In Duke's case, he's already jumped in. It's now a matter of adding the appropriate cash reserves and firing up AIM. It's my opinion that the Portfolio Control should be set at the original cost position. That is truly "by the book" and Mr. Lichello never hedges on that. Why handicap Duke's investment by not having him average down as AIM would suggest? If safety is the only concern of the investor, then there's money market funds or possibly gold coins, peanut butter jars or soap. If one is to eliminate risk then one is to eliminate reward. Can't have one without the other. Best regards, Tom