A.I.M. Users Bulletin Board

[lifo]

Hello Neil, yes, I stayed with the stock all the way to the bottom.

My initial purchase was at $14.75 Cdn in June 2000, I ran out of cash at $5.15, and the stock continued dropping all the way to $1.55.

When I ran out of cash, my average cost was somewhere about $10 per share, and, at $1.55, the AIM account was looking very ugly. There were only buys, and the account was showing a huge loss.

After running out of cash at $5.15, I stopped buying, since that's part of the AIM discipline.

However, this AIM account looked so hopeless when the stock was trading near $1.55, I decided to add some new cash and buy lots of shares, which I did at $1.65. That purchase made a big difference in how things turned out.

The stock never got back to my initial purchase price of $14.75. It's now trading at about $10.63. I sold shares along the way, removed all of my original capital, and still have lots of shares worth more than the total amount I put into the AIM account.

When the stock was trading at $1.55, the company had some difficulty "renewing their credit facility", and there was talk of the company filing for bankruptcy protection. If the company had gone bankrupt, then it would have been a very unfortunate AIM experience for me.

Anyway, the real issue with these situations is that, if there are no shares to sell at a LIFO profit, the AIM account becomes inoperable (stuck). So, adding some cash might help salvage some AIM accounts that are under water.

Regards,
Jack