Hi Ls,
Price cut's from above to below the moving average, all real becomes all virtual.
At that point in time you only have money and no shares. Then you will get your first buy and you update PC. You get more buys and your update your PC, until the official AIM Cash amount is exhausted.
Then you still have money to do buying, but should you update your PC? If you don't update from this point on, it is classic AIM and you continue buying until the MEB200 buy signal where you restore the AIM machine; updating PC from that point, probably would not work, unless you would have decreased PC at the MEB200 sell signal, basically decreasing the size of the machine at the sell signal.
Countering that however is the risk that the price may repeatedly zigzag between Mebane timing of being in and out.
If these zigzag's would happen then possibly you can catch them via the normal AIM algorithm, because you bought several packages on the way down. This would be classic AIM.
That monthly review falls in well with the 30 day AIM rule
The buying(and selling ) of packages on the way down, would be more than once a month, maybe weekly or daily. This will be possible because of the larger amount of Cash. It was shown that daily updating is better than monthly updating, only the fear of cash depletion stops people doing that.
In some cases potentially you might buy back real stock at a lower cost than the original average cost of purchase. That might be managed in one of two ways, either buy back the same amount of stock (but at a lower cost) or buy back more stock using the same cost of stock as that of the original average cost of stock. I suspect the former would be the easier of the two to manage.
When there is money left at the MEB200 buy point you can have several situations, you could even be selling stock via regular AIM sells. In general i think you would restore the machine to the point where all PC is accounted for, If there is extra cash available, then you could keep the cash, or buy the stock, but then you need to apdate PC for that amount, it is just a regular addition then.
If at the MEB200 point there is not enough cash left you can treat is as if you took cash from the machine and decrease PC.
You can also on the way down do more regular AIM buys if you intend to restore the machine by buying back the same number of shares. In that case the 'core' becomes smaller and smaller in size and you have extra cash to make more regular AIM buys. Even a decision could be made to buy back the core before the MEB200 buy point which would be more cost effective.
Kind Regards, K
