A.I.M. Users Bulletin Board

[SFSecurity]

Thanks for the very clear explanation of a vealie! Reading snippets here and there it is easy to think two comments are about two different things, not just different ways of saying the same thing.

Now a question. At: HubPages there is a description of AIM used with SANGAMO to illustrate how it works except he changes one element, the amount to buy. Here is how it puts it:

February 27, 2009 stock price is $3.57 a decrease in the stock value to $962.83, which is our 269.7 shares of SGMO x $3.57. 10% of this $962.83 is our safe value or $96.28. Cash is now $1073.28 which is our $1000 plus the profit from the sale of $73.28. Portfolio control is now $1100 rounded up. Take stock value $962.83 minus PV(portfolio control) of $1100 and you get a negative number of $137.17. This is loss. Our method tells us to buy stock to increase our position at a lower cost. The amount we buy is this negative amount of $137.17 minus the safe amount. Both numbers are negative we get a total of $233.46 so we buy shares with this amount of cash. We now own 335 shares of SGMO. Again I used $3.57 as my purchase price which is an estimate only depending on the market at the time of purchase.

As I understand it, rather than subtracting (that is to say adding a plus to a minus rather than subtracting a minus from a minus) the SAFE from the AIM amount and getting a buy of $40.89 he adds the two together to get a figure for a buy that is almost 6 times as much. Does this make any sense? Or have I got the AIM procedure wrong?

Best,

Allen