A.I.M. Users Bulletin Board

[JDerb]

Hi Ray..

Bill Miller (of Legg Mason fame) in answer to the question, "You've often said the guy with the lowest average cost wins. What do you mean?"

"Most people are not wired to sell what's going up and buy what's going down. It hurts. But your profit is the difference between your average purchase price and your average selling price. Bernard Baruch (a great investor in the 1920's) said nobody buys at the bottom and sells at the top except liars. Your stock will go down after you buy it, and it will go up after you sell it. Being willing to lower your average cost (by buying more when a stock drops) is a great strategy. But it's difficult."


One of the reasons this board has been so successful is the support demonstrated by Tom and all the other contributors to help newbies with the 'difficult' part of the AIM strategy. Buying when others are scared and selling when others are greedy. It's like treating your own feelings as reverse indicators. And AIM acts as confirmation.

Hope this helps.

Jon