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

To: jackfx who wrote (18621)	5/8/2020 10:24:40 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Jack, Re: Cash reserves for a single stock......... A 9% MRI was the recommendation for cash for a diversified portfolio. That would be around 14% for an individual company stock (1.5X the diversified cash level). This week for single stocks it's 17% suggested cash. I have more than that now in the AAPL position (after the recent sale it's now 36% cash). I took the sale opportunistically since the LIFO gain was very generous even as the MRI was suggesting just 17%. I also had done two buys in less than 30 days (sinned) so recovering the cash with profit was deemed a good idea. Cash had been 28% prior to the sale. I now have to wait until the Price/Share hits around $335/share before the next Sell decision is made. If risk remains low, I'll probably do a 'vealie' at that time. If risk has risen a sale of 5% or more might be justified. When the price/share reaches the next suggested sell price of $335, then the cash will represent about 33% of the total. If the MRI is asking for 35% then, I'll sell 5% of the holding. If the MRI remains bullish I'll probably skip the sale and do a 'vealie.' Considering most investors carry zero cash in reserve, a 9% cash level is actually quite generous at very low risk times. Most investors are at zero cash at bottoms and tops of markets. At the end of January, the MRI had been at 41% suggested cash for individual company stocks being AIMed. Now it's 17% but was as low as 13% at the start of April. The MRI is more reactive than the v-Wave. It moves farther and faster. The v-Wave is very conservative. Some people factor the v-Wave value by the BETA of the stock or fund they're using for AIM. That might adjust the cash suggestion either up or down. The MRI is based upon four individual components and their activity. The v-Wave is based on just one factor - the Value Line Median Appreciation Potential. Hope this helps, Tom PS: The current MRI values are 11% cash for diversified portfolios, 17% cash for individual stock AIM engines. Current v-Wave values are 36% cash for individual stocks and 24% for diversified portfolios. The v-Wave is still dropping as of last Friday where the MRI is starting to rise.