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

To: Jack Jagernauth who wrote (4893)	6/17/1998 8:26:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Jack, That's a hard/good question. There's the obvious tax implications of exiting the stock completely, but that's not reason enough for ignoring a chance to take profit. But it has influence if you don't have a better "home" for the money after the sale. VLSI's potential for growth has remained in place for long term appreciation since I first invested in it. Fundamentally it's a better, stronger company than it was a year ago, even though the price/share doesn't reflect that. The real reason is that I started my VLSI account with shares in the $6 to $8 range and they have been as high as the high $30's. Over the course of my time with the stock, it's peaked at about $12, $18, mid $20's, $30, and mid to high $30s. It's not easy to know which is the ultimate peak! In each case, AIM and I had sidelined most of my original investment as CASH, so how painful can the downside be? In the last peak, the cash reserve got to somewhere between $70K and $80K and now all that money is reinvested in what should prove to be "cheap" shares. Further, with each market cycle, the company has improved its sales, book value and market diversification, making it a better and better company overall. It still gets whipsawed with the rest of the semiconductor stocks, so that just makes it all the better for AIM. Finally, I've never developed the proper 6th sense for guessing the best part of a trading range. I used to hope for managing to get 80% of the range, missing the top and bottom 10%. In reality, I never achieved anywhere near that level. I don't remember the numbers exactly, but during the 1995 run-up and collapse, I believe I averaged with AIM to sell my "average" shares at about $30 and bought my "average" shares at about $15.50. The peak was $39 (?) and the low was about $12+. So, I missed the top 30% and the bottom 20% using AIM. That's actually better than I used to do. I in essence "traded" the middle 50% of the broad range. When ranges are so huge, it becomes nearly impossible to guess right about tops and bottoms. Also note the difference in the peaks between the Line Graph and the Bar Graph. The price/share peak in '95 was about the same as in '97, but my account was quite a bit more valuable in '97 because of AIM's activity. AIM loves speculative bubbles! AIM loves scary Bear stories as well! I hope this answers your question, Jack. If I've missed the boat, please let me know and I'll make another attempt. Best regards and thanks for the question, Tom