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Re: SFSecurity post# 38794

Saturday, 12/13/2014 3:01:02 PM

Saturday, December 13, 2014 3:01:02 PM

Post# of 47133
Hi Allen,

not sure how you only bought 32 shares when the price dropped to 45.06. Using 20K, 25% cash, 10% SAFE: Start with 264 shares at 56.8 = ~15,000$ (PC). At 45.06, SV is 11,895.84. AIM suggests you buy PC-1.1*SV = ~1,915$ worth of stock. That is ~43 shares.

The main question is: What would be a good entry point? Ocroft's method waits until AIM's market order (I am still not sure how that is calculated, but I think it is at the point the SV catches up with the PC, hence PC-SV=0), and that in turn means the stock may have risen a lot, esp. if one checks on a monthly basis.

It is a very interesting concept, but it is not a science.

If I were to apply it, I prefer getting in a bit earlier, and that is as soon as the stock gets back into the hold zone. So using a 10% buy safe, this means the SV would have climbed back up to PC/1.1. I would also use MACD (as suggested by ToolFuzzy) and volume to support my entry.

B.t.w. I used the above method and it helped me get into BGFV at 10.5. So far I've been quite happy with the results. BGFV is actually a stock that passed the Graham value screen while at the lows.

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