Heartland 99:
I have been without a computer for about a week so I haven’t been able to ask you any questions.
I really like your suggestion of using a Dollar Amount decline for Consecutive Buy Indicators instead of using Percentage Declines as a method to slow down the Cash Burn rate.
To make sure I am understanding this correctly, please let me know if this is correct:
An investor has a stock which he purchased for $10 a share. He decides to let it decline 15% before he makes his first purchase. When the price declines to $8.50 he makes his first Buy (a decline of $1.50).
Now then, he doesn’t make his second consecutive Buy until it drops an additional $1.50, or down to $7.00 a share ($8.50 minus $1.50).
His third consecutive Buy would be around $5.50 ($7.00 minus $1.50).
Etc., etc.
My questions are do you use this method with the AIM formula….Portfolio Controls, SAFEs, etc.?
Or, do you use some methodology other than AIM to determine how many shares to purchase whenever the stock drops the predetermined Dollar Amount?
Thanks for your help.
Best Regards,
Ray
