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

To: Bruce A. Bowman who wrote (4737)	5/21/1998 11:48:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Bruce, Just a couple of years before the Clintons came to the White House, Mr. Greenspan had raised interest rates simultaneously with the initial invasion of Kuwait by Iraq. That double whammy knocked the stock market averages way down, the bond funds also got nailed and my high beta portfolio lived up to its billing by falling about 1.5 times as far as the markets! A year later, I was blessing Mr. Lichello for the wisdom of his work. The Gulf War Gulped up huge amounts of my cash reserve and had a bit of indigestion for a couple of months, but came back stronger than ever by the time 12 months was up. A good friend of mine had just started with AIM at the time. He followed AIM's advise as the market came undone and bought heavily in the mutual fund he was using as equity. He let it recover enough so that he had a 10%-15% profit overall (early January, 1991) but then, just before the air and ground action was about to start, he quit AIM and went to cash to protect his gain. Within just a couple of weeks, AIM was sending him "I told you so!!!" messages on a regular basis. His response was, "Well, I'll just wait for the next opportunity." It's been a long wait!!! Actually, he did return his money to the market eventually and now lets AIM guide him. His trust increased tremendously from the experience. (Tom, if you're lurking here, hope you don't mind my re-telling that story!!) I'm not saying that we should enjoy watching suffering, but there's no reason not to compartmentalize our investing activity away from what's on the evening news. Should I send Saddam love letters for what he did to improve my net worth? Nah! That wasn't his intent nor did I see it coming. In the AIM Equity Warehouse business, we stock our shelves with the best products we can a the best prices we can. That's all! Then, when demand for our "goods" is high enough for us to profitably reduce our inventory, we do so. The driving force of the variance in the Supply-Demand price changes might be local, national or international in nature. It can be driven by consumer spending habit changes, population demographic changes, science and technology, etc. I guess it would be nice to be able to predict all those things, but I'm content to just "react" with AIM as my guide. Adding that experience with the drug stocks to your inventory of investment knowledge will help your confidence when you see a similar pattern forming sometime in the future. Thanks for relating that bit of history for us. BTW, did you remember to send a "thank you" note to Hillary for the knowledge you gained from the experience? Best regards, Tom