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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: mariner who wrote (1836)	10/10/1998 8:55:00 AM
From: OldAIMGuy	Read Replies (3) \| Respond to of 4710

Hi M., I read about AIM in the mid '80s (it's been around since the '70s) and implemented it in January of 1988. The date is no small coincidence following the '87 "correction!" At that time I did all the calcs long-hand. Not hard, but tedious. Next step was to build a template for Lotus 123. In that, I tested lots of stocks and funds with which I was familiar. I never won as big with AIM, but I rarely lost. I tried one year tests from the '87 highs through the "crash" to mid -1988 and it usually beat "buynhold." I tried 20 year histories (1969-1988) and again it shined. I was sold. The program I now use is still the same algorithm, but is designed as a single purpose, stand-alone program. It's easier and faster for keeping real time accounts like VTSS going. However, it's not a full blown spreadsheet, so for doing historical "what if's" Excel, etc. is still the way to go. Since I'm not a theoretical investor, but a real one, I use the appl. specific program the most, but still head back to my old template to test out new ideas. It's a good combination. All in all, AIM is a great program for handling stocks with high BETA and volatility ratings. It solves many typical investor's problems in decision making. It takes some profits as prices rise, it uses the accumulates cash to repurchase shares as prices fall. All this is done around your core position in a risk limiting fashion. It DOESN'T eliminate fundamental analysis or do-diligence. However, it's saved my butt many times! AIM's somewhere between BuyNHold and short term trading strategies. It's more active than BnH but not as hyperactive as day trading. It satisfies my long term investing nature while doing some trading for risk management. As the graphs show, AIM spent most of the time with VTSS in the "Sell" mode. The original algorithm was faulty in that it sold endlessly and raised way too big a cash reserve with a stock like VTSS. I created an artificial upper limit on Cash to solve this problem. Since then I've been very happy with the method. I don't beat myself up with the Gut Wrench as much as before, nor am I glued to the ticker like I was previously. Hope this helps, Tom