A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi Mike, Re: LD_AIM information............

Here's a link that should help:
http://web.archive.org/web/20120614135045id_/http://www.aim-users.com:80/aimlodown.htm

Explanation and spreadsheet, I believe. Grabber's theory is based on the fact that we never sell our core holding value with traditional AIM. (if we start with $10,000 invested, even after we've doubled our money we still have at least $10,000 invested) He then suggests that not buying all of the core position should improve overall performance since that initial position is never traded.

He originally used LD-AIM as a method of helping him diversify his portfolio to more individual AIM engines. For instance, if instead of investing $10,000 in a single holding, why not invest just $3333 in three different stocks/funds? Tell each AIM engine that the full $10,000 is there but that $6667 of it is "virtual" investment with just $3333 as actual. AIM will give signals for trading just like the $10,000 traditional AIM, so it's traded like traditional. This way he managed to diversify to three investments with the same funds as traditional AIM would have had for just one.

Since you own less total, if the stock in question goes up substantially, you will sell out of all shares. This is something traditional AIM never does. Grabber theorized that say 3 sequential sales emptying the account would be good enough in return.

He then suggested continuing the AIM engine even though no shares remained to be sold. Keep the books as though one continued the traditinol AIM investment and when LD-AIM eventually asked for a buy, start to accumulate shares again. This is, of course, assuming the investment in question is still desirable.

Hope this helps.