Friday, November 04, 2022 11:22:14 AM
When you learned of Mr. Lichello's AIM, what was your first thought of why it might be useful to you?
For me, I'd already ridden the Stock Market Rollercoaster for a while and had always chastised myself for not having cash to buy when the real bargain prices came along. The amount I would risk in a single investment was based on what was available to invest at the time.
(note the size of the RED (invested portion) of the graph doesn't change much through the long bullish period)
It wasn't until probably a full market cycle had passed that I began to realize AIM's "risk containment" aspect. I'd started my official AIMing in 1988 after a year of modeling AIM against my own seat-of-the-pants management. 1988 was a year of recovery after the Oct 1987 "crash." So, AIM was in full Sell mode for much of '88. At the end of that year a bundle of cash had built up but my dollars at risk were quite steady through the 12 month period. That's Risk Containment at its best.
This histogram shows that AIM ability quite nicely. During the rising price period AIM took profits and capped the dollars at risk nicely. Then when the buying started, through the rise in Portfolio Control from those buys a new maximum risk amount was established. Right now the price/share of that equity is rapidly approaching the point where AIM will again cap the dollars at risk and start to sideline cash. The price/share is just 3.5% below the Next Sell price as of this AM.
When this next Sell takes place, it will realize a 33% LIFO profit on that last buy. What a nice way to keep risk contained.
Best wishes,
OAG Tom
For me, I'd already ridden the Stock Market Rollercoaster for a while and had always chastised myself for not having cash to buy when the real bargain prices came along. The amount I would risk in a single investment was based on what was available to invest at the time.
(note the size of the RED (invested portion) of the graph doesn't change much through the long bullish period)
It wasn't until probably a full market cycle had passed that I began to realize AIM's "risk containment" aspect. I'd started my official AIMing in 1988 after a year of modeling AIM against my own seat-of-the-pants management. 1988 was a year of recovery after the Oct 1987 "crash." So, AIM was in full Sell mode for much of '88. At the end of that year a bundle of cash had built up but my dollars at risk were quite steady through the 12 month period. That's Risk Containment at its best.
This histogram shows that AIM ability quite nicely. During the rising price period AIM took profits and capped the dollars at risk nicely. Then when the buying started, through the rise in Portfolio Control from those buys a new maximum risk amount was established. Right now the price/share of that equity is rapidly approaching the point where AIM will again cap the dollars at risk and start to sideline cash. The price/share is just 3.5% below the Next Sell price as of this AM.
When this next Sell takes place, it will realize a 33% LIFO profit on that last buy. What a nice way to keep risk contained.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy.....
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