A.I.M. Users Bulletin Board

[Conrad]

Hi Conrad RE updating PC after a BUY

PC = $10,000
stock $10
Pretend shares total = 1000 (this is what you use in the formular)
Real shares = 500

Stock goes down to $8

PC = $10,000 - $8,000 = $2000

It is best to use 5% SAFE and 10% min order size so .....

$2,000 - $100 (5% safe) = $1900 which is greater than 10% of the $8,000 stock value so BUY

$1900 / $8 = # shares to BUY . Add that to the original 1000 shares

PC becomes the original $10,000 + 1/2 $1900 BUY order or $11,900

Hope that helps

Toofuzzy
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NO. It does not help as it is not in line with what you told me in the previous message

I am a Nit Picker. . .I do exactly as I am told . . . .(in this case).
This is not at all what you stated in your explanation on using Virtual Shares. You Stated this:

Instead of using 10000 stock and 5000 cash, with Virtual Shares it becomes this:
Stock = 5000 and R= 10000 and PC= 10000. The PC is inflated with 5000 worth of Virtual shares

This means that the Buy Algorithm becomes this, after the 10% drop in price:

B= (10000-4500) - 0.05*4500. . . .I used SAFE= 0.05

In your example above you are doing something completely different than wat explained to me!!!
You started with stock Value = 5000. PC = 10000 and THEN when you set up the AIM you use an inflated PC= 10000 but also inflate the stock value itself with 5000 so that the stock value is the Virtual Value of 10000=5000+5000. Then when the Share Price is dropped by 20% you have this:

Buy=(10000-8000) - s*8000

That is a different Kettle of Fish and can be interpreted as an 100% Inflation on Three elements in the Buy Formula

The PC
The Stock Value
SAFE Amount

If THAT is the intention of what you meant then my result are, of course, quite different. From your results.

ZZzzzz
It is past 6 AM here!