A further strike against us[AIMers] is that we can't know, in advance what the optimum level of initial cash reserve should be.
This counts for any investment method in which not al the available cash is used-up at the start. . .plenty of non-AIMres do that too and invest more as the price goes up, which is logical as long as one becomes confident, after the first cautious buy, that the price is in the lift and that one can escape before Big Dipper arises. On this score not the method is the important thing but the degree to which one understands the stock market dynamics.
This is the "Overlay Management" that I frequently mention and it is most important for any investment technique.
You are more or less stating the same thing with you question: "the larger question becomes is AIM still a valid system to use on this particular holding? This all comes down to: the more one understands the market and the companies in which he is investing then his "System" becomes his own overlay management technique and no standard answers to this question are available other than my motto: “I don’t hold on to stock you think is not worth owning”. . what others say is then irrelevant, even if it is Warren Buffet that said it.
Applying some sort of overlay management is what experience AIMers now-a-days are doing to some degree already as they continually try to intervene with the "AIM by the Book" method and as a hobby try to adapt the basics of that simple “AIM Starter Kit”.
I would be surprised if there are any experienced AIMers left that do not intervene as they go, or do not tweak the "Dials" on their "machine" or redesign their "machine" so that it has more "dials" to tweak with.
The interesting thing is that AIM is ridiculously simple in its concept so anyone that starts with is it is usually capable to think of improvement. . . . “With a system this simple there must be ways to make it better” is an easy step to come to believe. When you consider a complex investment program that uses a multitude of inputs and a hidden program structure no user is capable of “getting into” the software core to “fiddle” with it.
The simplicity of AIM makes it such an lovely thing that we thing should be fixed and especially for Americans it acts like magnet on steel. . . they are brought up with the philosophy that is based on this:
If it ain’t broke, don’t fix it!
AIM broke the day it was invented, it has a flaw, but it works reasonably well for newcomers to the system, but Americans and one Dutchman are “fixers” by mature. . .the Do it Your Self Mentality so useful to The Pioneers was born there. . .so they, and the one Dutchman, soon discovered that AIM was “broke” and they started to "fix" it as they dicovered its flaws, so now there are 15 or more “repaired” versions of it:
Lichello Off The Book AIM; Vortex AIM; TurboVest AIM; PremiVest AIM; High UP-AIM, Low DOWN-AIM; MACRO AIM; MICRO AIM. . . Don Calson AIM, LOW Cash Burn AIM, CASH Limit AIM. . .just to name a few I can think of.
How many amateurs, like the high calibre AIMers on this Forum, have made themselves a “repaired” version of Wall Street?
Case closed.
