Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Bruce A. Bowman who wrote (3696)	12/29/1997 7:45:00 AM
From: OldAIMGuy	Respond to of 18928

Hi Bruce, I think that would work fairly well. It would have a similar effect to the way Jim B.'s Twinvest Risk Formula works with individual stocks. If a stock is already 50% off its most recent high, as Charlie says, it's probably closer to its bottom than its top! We shouldn't have to burden the new account with the full IW value. I've thought about how I've handled this with other stocks over the years. If one starts fully invested and uses AIM to generate a cash reserve as the price rises, the selling starts early and continues until we feel the cash reserve is max'd out. That could take quite a bit of selling to generate an overall 50% cash reserve, for instance. This is how my VTSS account started. It's hard to say that this is a "Bad" thing since all the sales were done on a profitable level. If the price rise is steady, starting with a lean cash reserve makes the portfolio look much more profitable. This is because the equity side isn't having to work as hard to bring the profits up while dragging along the cash. A fatter cash reserve is nice if the recovery in price is less steady. With the price dribbling along near the low for several months, AIM may need some cash to make some use of these small bounces. All in all, I like Charlie T's screening method. I'd like to digest this food for thought and see what form of movement it might make! Best regards, Tom