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Strategies & Market Trends : AIM Questions and Answers -- Ignore unavailable to you. Want to Upgrade?

To: Skipperr who wrote (67)	10/31/1998 1:03:00 PM
From: Bernie Goldberg	Read Replies (1) \| Respond to of 221

Hi, Mr. L's book uses numerous of AIM investing. Unfortunately the most quoted is one which starts and ten goes DOWN to 4 and then back up to 10. It then repeats the cycle. An uptrend is definitely not a necessity. If you will look at a 3 or 4yr chart of my favorite stock(APCC)you will notice that it goes from 25 to 9, then back up to 30, then down to 15, then back up to 30. This cycling which all stocks do albeit at different rates is the fuel that makes AIM work. My other best stock is Merck. MRK seems to do very little but go up. This does not make it a very good AIM stock. However, one can complain too strongly about something that almost quadruples in 4 years and also pays a nice dividend. I tend to accumulate too much cash with MRK because even when it does go down it doesn't drop far enough. Basically I am an old fashioned guy and don't feel comfortable tampering with Mr. L's beautifully simple formula. I can accept Tom's IW and varying the beginning cash balance, but every time I change something else it jumps up and bites me you know where. As far as I am concerned the biggest error I see here on this thread is the over use of technical analysis. People are all too much concerned about when to buy the stock rather than which stock to buy. With AIM you don't have to worry about trading windows. It is all too evident that there are many translations of Mr. L's book. One thing that is clear to me is that you decide on a company. To quote Mr. L, companies like GM, EK, S, or DD are better buys than Dewby Dewby Dew Dynamics because "if your ship is sinking, and you have five seconds to make up your mind, and you see two life preservershanging in front of you, and one is stamped Du Pont while the other bears the imprint Dan-Dee Flote, you will grab the one stamped Du Pont....names that have a heritage, a tradition , a trust...they will go down on one knee, but they almost always get back up. They are certain to float" pgs 121-122 GM over the last 20 months has moved up and down from 50 to 75 back to the high 50's and is now in the 60's. Since July, many of my friends have been walking around with long faces. After all DD is down from $84 a share to below 60. I'm smiling because AIM told me to buy lots at 53 and 54. By the way I sold a bunch at 82. Alright I missed 84 but so what, the cash from the $82 sale has been making almost 6% in a short term bond fund which made the purchases at 53 even cheaper. By restricting my purchases to twice a month I don't have to worry about whipsaws in the market. If I purchase something that immediately starts going down to the point that I run out of cash, I just stop. The only time I have lost money with AIM was ATCT which no longer exists. I started at $24. It went down to $2. I ran out of funds long before that. I was so sure it was going to go up I kept shovelling more cash to it. (this is definitely not recommended by Mr. L.). It went back up to $4 but not far enough to trigger a sell. After a few months of nothing happening I decided I had made a mistake with it and sold it for a loss. It eventually went to fractions before it disappeared. You can't win them all. However the same year we wrote of the losses, we had so much in the way of capital gains that my accountant decided to buy Mr. L's book. Our local bookstore tells me I personally responsible for the sale of 50 of Mr. L's book. Of those 50 only four are using AIM. Two stock brokers, one accountant, and one bank officer. The others are still trying to get rich the easy way. Hmmmm! Lots of luck and remember to AIM high and keep some powder dry! Bernie