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

To: Jim Battaglia who wrote (6494)	12/26/1998 9:26:00 AM
From: OldAIMGuy	Read Replies (2) \| Respond to of 18928

Hi Jim, With the bumpy road we've traveled this year as investors maybe even AIM's shock absorbing qualities could use a "bump stop" in the suspension! Are you and Dave suggesting this from extremely low cash reserve levels or just when your cash is in surplus? If I understand what you are suggesting, you would do a "vealie" when an AIM order to sell was indicated. Then, just to back up the decision, you would also place a Sell-Stop order for the same amount at a price just below the indicated "vealie." If AIM had called for selling $1000 you then bump the Portfolio Control by 500. Next you call your broker and place a Sell-Stop order for $1000. Is this how you envision it? It certainly would make the graphs look nice to have that last sell at or very near the top of each mini-cycle high! It would also add that extra bit of Cash Reserve needed to fend off the Lemmings when they decide to leap. It also would, as with this week's JBL example, have let the entire amount grow nicely as long as the indicated upward trend continued uninterrupted. Just to fill out the concept, as this continues, do you cancel the lowest Sell-Stop when the next one is placed? Or do you let multiple Sell-Stops sit on the books? Let them stack up, so to speak? Obviously you don't want a Sell-Stop to trigger just when AIM is going to start asking you to buy! You'd be hit with a taxable event and then have to make a purchase as well. Or do you use this strategy only as an adjunct when you are pretty fully funded on Cash Reserve? I have to admit that Bob Norman and I have noticed we have a tendency after pulling a "vealie" to look back later, if the market has gone down, and say "Gee, I guess that one would have been better as a Sell!" If you used this concept only once your cash levels are back to optimum, you would get the benefit of the "vealie" strategy along with that satisfying "last sale" before a dip. We all know that Sell-Stop orders are activated "at or below the price" indicated. It's always been the "or below" part that scared me! However, if we already had a fat enough cash reserve, if we didn't get every penny we were expecting, it would hardly matter. I'm going to stew about this and maybe drag out my old Dos 123 AIM template one more time for some testing! Thanks to you and Dave for bring up the idea. If it can be accomplished without adding extra burden to how we run our AIM accounts, I'm all for it. Remember, I'm very lazy and don't really like to work! Best regards, Tom