Re: Virtual High
Hi ocroft.
I would do a virtual BTB 50-50 monthly plot from the stock highest price that i am interested in buying.
I think I understand now. You are saying that that 10.00 price is where you start (virtually). You don't take an actual position at that price. In essence, you're setting your PC there. and at that point in time, all of your shares are virtual. You run AIM as normal from that point.
I think that is what Rien or Karel termed 'No Down AIM'.
"The "upside" of Low-Down AIM is greater trading and diversification. The downside is that one can sell out of a holding that has begun a very long and profitable price appreciation".
I don't think that selling out(taking profits) is much of a downside on the hope of a very long and profitable price appreciation.
LD -AIM from what i see uses the compound effect. 20% compounded 4 times is a 100 % increase. 15% compounded 5 times is a 100 % . Profit extraction plus compound effect is just as powerful.
Agreed! And, as the program runs on (some of mine for 7 years already) the impact of the virtual shares gets much smaller anyway.
For example, my largest holding currently is SNDK. Since early 2004, I've had 21 AIM Buys and 30 AIM Sells. This LD-AIM program has spun off many thousands of $ of profit.
As of today, the virtual shares represent less than 20% of the total in the program.
Another great program is AXAS (formerly ABP). The beginning position of Actual was 1/3 of Virtual. After 20 Buys and 28 Sells, the Actual shares total over 7 times the initial Actual position and represent almost 80% of the total program. Again this shows the declining influence of the Virtual position and the compounding effect of AIM overall.
As for your selling out approach: IE, once the holding gets back to your 10.00 entry point; I'll have to think about that. But I can say that some of my programs sold out at much higher than the intial entry: CREE's last Sell (Feb, 2010) was at 70 versus an initial price of 28.75. I've since begun a new program on it, starting at 59.00.
This was fun stuff to think about!
Best Regards, Steve (The Grabber)
AI
