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

To: rgammon who wrote (17102)	10/17/2001 10:36:36 AM
From: Bernie Goldberg	Read Replies (1) \| Respond to of 18931

Hi Robert, I don't have the luxury of AIMing all my income funds yet. If I have some extra cash to put into straight income producers. I look for ones that are trading at a discount. I have observed that most CEFs with consistent dividends trade in the range +/- 12%. This it seems to me would fit in with an AIM program. My REIts are somewhat hybridized. They provide income which is not totally necessary, but does come in handy. I AIM those with buy/sell safes set 10/20. This quite often provides me with a 50+% LIFO gain which is the equivalent of four years of dividends. This goes into the Cash Reserve which I use for Buys when or if there is a significant drop in price. Witness CEI yesterday. Hopefully it will drop just a little further and give me the opportunity to buy back some shares that were sold in April and August of this year, and in June and March of last year. It's been quite pleasurable to be holding these REITs over the past 19 months. While there hasn't been a great deal of activity, it has all been in a very pleasant direction in these trying times. Of course getting paid 11-12% while you wait for an AIM trade isn't too hard to take either. I don't account for the dividends in the AIM programs. Twice a year I compare my MMFs to my Cash Reserves. I take the surplus, if any, and use it either for a trip someplace interesting or as an addition to a needy AIM program. If none of those exist I will use it to add to either ACG or RCS. Regarding the attention to discount/premium as market timing, I have a question for you. If you were in the market for buying a new GM (or any other brand) car, and you knew that there was going to be a 10% off sale next week, would you buy it now or wait a week? Bernie

To: rgammon who wrote (17102)	10/17/2001 2:48:01 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18931

Hi Robert, Yes, but by coincidence in the past. I plan on using the cross-over points as an additional bit of information as to when to ask AIM what size order to place. "One can look up the premium and discount values in BARRONS each week in their Closed End Funds section. Please note that most closed end funds sell at a discount more time than they sell at a premium. So, just because something is selling at a discount doesn't mean that it's necessarily a bargain. In Value Line, they plot the NAV along with the Price/Share, so you can look at the "cross-over" points a bit more closely. Generally the Price/Share "chases" the NAV. So, then when the Price/Share crosses the NAV line, it usually is signaling a change in trend. It makes for a good time to then ask AIM how many shares it should buy or sell. You can also use these "cross-over" points to help determine when is a good time to start AIMing a "CEF." Again remember, not all CEF's close the gap between their price and NAV and ever sell at a premium to NAV. In those cases, you should then look at the size of the discount to NAV at various times. If the CEF ranges from -25% to -10% of NAV, then it would be best to wait until you again see near -25% discount before starting or AIMing." Best regards, Tom