A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi Steve, Here's a couple things on JZGalt's analysis of tech stock growth vs price.....

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=12307287&s=quadrant

which will lead you to:
http://www.confirmatoryanalysis.com/zdtech/index.html

which shows this graphic:


I guess this is a bit different than the quadrants about which I was refering but still in the same vein. Dave looked at the life cycle of the company and overlayed it with a P/E valuation and then pointed to where the stocks could be played. I always thought AIM could work in almost any of the quadrants, but that different levels of Cash Reserve should be allocated for each. In quadrant I for instance, it might be best to never use "vealies" and let the cash reserve run as high as AIM would take it because of the very high P/Es and expectations. That way when the bubble pops we can ease that cash back in when the stock shifts even possibly to Q II.

My thought is that a company heads for Q III or QIV that it might be time to either shift it to a different level of our Investment Pyramid or eliminate it from our holdings completely.

Best regards, Tom