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Last Post: 10/20/2019 4:01:45 AM - Followers: 276 - Board type: Free - Posts Today: 1

A.I.M. Users Bulletin Board
Robert Lichello's "Automatic Investment Management"
(Compliments of Investors Hub!)

While the AIM book is no longer being reprinted, it is available from Amazon for their Kindle for $5.99.

Run A Successful Equity Warehouse
Welcome to the AIM Users Bulletin Board. This is the thread to post your thoughts, questions and comments on the use of Robert Lichello's Automatic Investment Management for handling the risk of being involved in the Equities markets.

The AIM strategy gives the user LIFO gains of 20% minimum if the method is followed "by the book." It is ideally suited to those seeking long term investment growth while managing the risk of being invested.

The v-Wave........
Mr. Lichello used fixed cash starting levels; first it was 50/50 then 67/33 and in the last edition of his book 80/20 for the Equity/Cash ratio. This "one size fits all" approach is like a broken watch that shows the correct time twice a day but is wrong the rest of the time!

Minstrlman, a regular contributor here, has been gathering data from Value Line and formed a highly capable risk-cash indicator for our use. As an adjunct to the AIM methodology we now have a Cash Indicator which helps guide our starting and ongoing Cash Reserve level of AIM relative to measured market risk. It can be used as a general market barometer or specifically with the AIM method. The v-Wave (or VW) is derived from the Value Line "Appreciation Potential - Next 3-5 Years" (VLAP) indicator shown weekly in their Summary and Index Section for their 1700 stock edition. Looking back through V/L's history we find the peak Appreciation Potential occurred 12/23/1974 at +234%. Our continuous database starts January of 1982 and we scaled our "zero cash" to the market risk low point of early that year. We take the VLAP and  manipulate it to get an indication of how much cash should be reserved for diversified mutual fund AIM accounts. It should be multiplied by your stock or portfolio's BETA to get the cash reserve level of less diversified or more aggressive holdings.  

                                                      v-Wave Weekly Cash Reserve Indicator For AIM Users

Current years of the v-Wave:

Median value for the v-Wave is 44%. High Risk is 51% cash or higher for individual company stocks. Low Risk is 36% cash or lower. 
To get a more proper cash level for diversified mutual fund holdings we divide the currenty "Stocks" value by 1.5. This gives us 36% as the high risk threshold and 24% low risk
with mutual funds. 

                                      Looking at the cumulative risk of the v-Wave gives another perspective:

Cumulative v-Wave is calculated by taking each week's v-Wave Stock value, subtracting the median value from it and adding it to the previous total.

Here's the Historical v-Wave during various times since 1982:

Significant historical events are shown nicely here and the v-Wave's response at those times.

v-Wave Calculations can be found at #30219. The data are a work-in-progress for now.

AIM Users Home Page: http://www.aim-users.com/index.html AIM Weekly Newsletter (free): http://www.aim-users.com/3bbs.htm AIM Stock Examples: http://www.aim-users.com/pic.htm

AIM "Cash Burn" Chart

http://www.aim-users.com/cashburn.htm AIM Exchange Traded Funds (ETFs) Board http://www.investorshub.com/boards/board.asp?board_id=1292 Tom's Retirement Account with ETFs http://www.aim-users.com/etfunds.htm Software for AIM accounts: http://www.aim-users.com/aimware.htm I started using AIM full time in January of 1988, just after the nasty "crash" of '87. Those of us who have used AIM for a while are willing to help you get started with your own Equity Warehouse. Please feel free to ask questions here on this thread. Also, I've compiled some of the more frequent questions at: AIM FAQ's: http://www.investorshub.com/boards/board.asp?board_id=992 and http://www.aim-users.com/qanda.htm With AIM, you can choose stocks and funds for their Long Term investment potential. AIM will take care of most of your market timing and asset allocation needs while you wait for your favorite companies' stocks to prosper. Tom's AIM/Perverse Investment Candidates: http://www.investorshub.com/boards/board.asp?board_id=1010 Newsletter Archives - http://www.aim-users.com/archive.htm AIM for "Rational Exuberance," Tom Veale

#37762  Sticky Note Hi TFO, My apology for directing that last OldAIMGuy 06/05/14 08:07:49 AM
#37457  Sticky Note Re: Newport AIM software ls7550 12/28/13 08:56:43 AM
#36711  Sticky Note Thanks LC, Now they can use the "calculator" again! OldAIMGuy 06/04/13 05:01:59 PM
#36709  Sticky Note www.aim-users.com This is a copy of www.aim-users.com that lostcowboy 06/04/13 09:56:02 AM
#30219  Sticky Note Hi Glen, RE: Calculating the v-Wave................... OldAIMGuy 05/26/09 11:32:16 AM
#43929   Hi Tom, karw 10/20/19 04:01:45 AM
#43928   VWave 2.01* JDerb 10/19/19 12:54:59 PM
#43927   Finally some traction, Update Firebird400 10/16/19 12:15:43 PM
#43926   Update from VL this week shows the median OldAIMGuy 10/14/19 05:38:12 PM
#43925   Thank you Clive, OldAIMGuy 10/14/19 07:50:57 AM
#43924   Hi Tom. ls7550 10/13/19 08:38:23 AM
#43923   Thanks JD, OldAIMGuy 10/13/19 08:01:43 AM
#43922   VWave 2.01* JDerb 10/12/19 11:12:49 AM
#43921   Hi Toofuzzy ls7550 10/11/19 07:59:26 PM
#43920   Hi Toof, Re: Interest Rates and Inflation.................. OldAIMGuy 10/11/19 11:05:03 AM
#43919   Hi Clive Toofuzzy 10/11/19 08:13:23 AM
#43918   Re: Negative rates ls7550 10/11/19 06:00:50 AM
#43917   Hi Tom, karw 10/10/19 07:53:49 AM
#43916   Hi Tom, karw 10/08/19 11:11:42 AM
#43915   Hi Karel, OldAIMGuy 10/08/19 08:48:59 AM
#43914   Hi Firebird, karw 10/08/19 06:20:50 AM
#43913   Thank you Tom, karw 10/08/19 06:12:56 AM
#43912   Commission Free Trading, Firebird400 10/07/19 08:03:35 AM
#43911   Hi K, Re: Continued AIMing...... OldAIMGuy 10/06/19 04:47:30 PM
#43910   Hi karw, Re: Negative Rates, Firebird400 10/06/19 01:48:54 PM
#43909   Hey all, karw 10/06/19 09:45:13 AM
#43908   VWave 2.01* JDerb 10/05/19 12:22:54 PM
#43907   VWave 2.01* JDerb 10/05/19 12:21:51 PM
#43906   Hi F400, OldAIMGuy 10/03/19 11:44:01 AM
#43905   Hi Toof, Re: BIB activity............. OldAIMGuy 10/03/19 11:32:59 AM
#43904   Added 12.6% more shares of BIB today at $41.50 Toofuzzy 10/03/19 11:24:04 AM
#43903   Update... Firebird400 10/03/19 09:08:57 AM
#43902   Hi Tom Toofuzzy 10/02/19 01:27:58 PM
#43901   Trade commissions go to zero....... OldAIMGuy 10/02/19 08:47:37 AM
#43900   September turned out okay for my "Sandbox" retirement OldAIMGuy 10/01/19 08:55:24 AM
#43899   Thanks for posting the chart Tom. Toofuzzy 09/29/19 10:16:40 AM
#43898   Thanks JD, Here's how the v-Wave looks in OldAIMGuy 09/28/19 10:39:13 PM
#43897   VWave 2.01* JDerb 09/28/19 12:34:32 PM
#43896   Thanks JD! OldAIMGuy 09/25/19 12:51:09 PM
#43895   Happy Birthday, Tom! JDerb 09/25/19 11:17:25 AM
#43894   VWave 2.01* JDerb 09/21/19 11:46:55 AM
#43893   Hi Adam Toofuzzy 09/19/19 05:52:12 PM
#43892   Hi Toof, The idea of selling and buying Adam 09/19/19 10:50:18 AM
#43891   Aimstudent The answer to ALL tax questions is " Toofuzzy 09/16/19 08:11:06 PM
#43890   Re: Tax Planning... AIMStudent 09/16/19 03:50:01 PM
#43889   On a thread about Fibonacci trading I posted this: Toofuzzy 09/15/19 01:24:46 PM
#43888   VWave 2.01* JDerb 09/14/19 11:41:46 AM
#43887   Tax planning Toofuzzy 09/13/19 02:19:36 AM
#43886   VWave 2.01* JDerb 09/07/19 11:37:24 AM
#43885   Hi Gang! The Grabber 09/06/19 11:31:42 AM
#43884   With the recent move up in the market Adam 09/06/19 11:26:06 AM
#43883   A Will Rogers Quote ocroft 09/05/19 03:13:55 PM
#43882   Market Valuations look better than any time since January. OldAIMGuy 09/04/19 05:36:17 PM
#43881   Toof, I have not really had that problem with AUC89 09/02/19 09:49:39 AM
#43880   Thanks, Tom. Your graph certainly helps those of JDerb 09/01/19 01:30:57 PM