A.I.M. Users Bulletin Board

[OldGrantonian]

Strange calculation for AIM?

I'm not an AIM expert, but this link contains some features that seem to be different from the original AIM:

http://hubpages.com/money/robertlichelloAIMSystem

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First difference

Original AIM: Portfolio Value = Stock Value + Cash

Link: Portfolio Value = Stock Value

Of course, that's just a different naming convention, but it's confusing for a beginner.

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Second difference:

Original AIM: Uses a value of "10%", which is referred to as "Safe", and is applied to the "Stock Value" only at the end of the calculation as a filter for the Market Order.

Link: Uses a value of "10%", which is added to or subtracted from "Portfolio Value", as the first step in the calculation.

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I tried to write the AIM method in a single line of algebra, and then try to transform it to the Link method. But my algebra is too ancient.

It seems to me that the backtesting results in the link are good. So, I could use the link method "blindly". But I still like to know what goes on inside black boxes.

Lichello's explanations are easy to understand.

I would be grateful for any comments.