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

To: steve in socal who wrote (4549)	4/24/1998 2:03:00 PM
From: OldAIMGuy	Read Replies (2) \| Respond to of 18928

Dear Dances kinda Strewie, That was well said!! Didn't know you had it in you!! You're right, FEAR and GREED are like those hidden monsters in the bedroom of a child on a dark night. You know you should "go potty", in fact it's getting darned urgent, but it's so SCARY to take that first step!! Rob can take a look at the total size of the account at this point and determine if the amount at risk is still appropriate for his overall plans. I've had stocks that have done well after being pounded - similar to DROOY - and that is what I've had to do. Let's say we were willing to start with a risk envelope of $10,000 (invested) because we had a cash reserve (assume $10,000) to continue AIMing if the price fell. However, after heavy buying we now have a full $20,000 in the market. Our risk envelope is larger than at the start. We can justify the increase because we bought at "bargain" prices. Some of the shares are break-even, but others are at a loss. Current value is about $15,000 and Portfolio Control is about the same. Then the stock starts to climb back up and suddenly we have $25,000 at risk in the market! Now wait a minute! Not that long ago we were only willing to risk $10,000 and now we have more than double that "on the table." AIM says "Let's contain the risk here by selling off some shares. How about if we reduce our exposure by $10,000 (back to near the current Portf. Control value). That leaves plenty invested relative to our starting point and gives us a cushion if our "fortunes" reverse." One can let the Risk Envelope grow to the point it's really a Risk Shipping Container!! Then it's time to see if that Shipping Container fits with the rest of the overall plan. Rob, if you're reading this, Repeat: Plant and Harvest, Plant and Harvest, Plant and Harvest, Plant and Harvest!!! Best regards, Tom