Good Morning All.
Happy NFL Conference Championship Day!
I've been following the latest discussions with interest, and it seems to me that regardless of whether one chooses to AIM (in any variant) individual stocks, ETFs, MFs, etc, the conversation always migrates to how to mitigate the risk of investments either going to zero, or dropping down and staying down for long periods of time.
The resultant delay of return, waiting for some reversion to mean; cash depletion, waiting for some Selling to replenish it, and any other unforseen market level obstacles will play havoc with just about any system, AIM included.
Also, virtually everybody here praises the fundamental advantages of AIM as Mr. Lichello envisioned. That is what tends to bring folks here to begin with. And of course a lot of discussion happens around some of AIM's 'flaws' and how to tweek to avoid them.
So I suggest that our next 'group-think' task is to figure out how to incorporate an Automatic Stop Loss mechanism into AIM.
We already have many 'automatic' tweeks that are fully integrated: Vealies, 30 day waits on consecutive buys, Incremental Adjustments to PC, LD-AIM and so on (with apoligies to those not mentioned here).
As many of you know, we've talked about this many times especially since summer of 2008 for obvious reasons.
Imagine if you will a mechanism that would essentially cut off the big market downswings eating away at one's portfolio value. One that converts most of that probable value reduction into cash, which will be flush and ready for the inevitable return (reversion to mean).
Having the choice of whether to abandon an indiviual stock that won't recover would be a nice plus as well. I think the key is to have a mechanism that takes $ off the table until such time as the picture clears up a little. Why not let the other players figure it all out for us with their money?
Whether the downswings are related to secular bear markets, sector, industry or even individual stocks, such a mechanism could apply within any portfolio construct (Stocks, CEFs, MF's REITs, ETFs).
So rather than reaching for some new 'Holy Grail', we think more in terms of embellishing the one we already have and that is AIM.
Personally I think I could sleep even better if I had LD-AIM-ASL managing my equity warehouse!
Just my 2 cents.
Have a great football afternoon. I'm hoping for the Packers and Steelers to win today. Then I can support both my home state team (Pack) and my son-in-law's team (as he is from Pittsburg). Plus Super Bowl 45 is being held here in the DFW area. It's gonna be a crazy few weeks here!
Best Regards, Steve (The Grabber)
