A.I.M. Users Bulletin Board

[AdamH]

Hi Steve, regarding the problem of selliing out of a rising stock with AIM and worse with LD AIM, this is more of an issue with mutual funds, which tend to rise over the long term with the market. One way is to pull "Vealies".

I have another tweak different than a Vealie for this which I reserve for funds, and that is: I increase my PC(portfolio control) by a percentage over time.

The way to follow what AIM is doing is to look at PCPS (Portfolio Control per share) which is PC/(# of shares held or virtual shares in LD AIM) because AIM trades around this PCPS.

At first I thought I would just raise PC by say 10-15% which is a typical gain by a mutual fund, but this caused too much buy bias. The reason is that as a stock moves up and a sell takes place, AIM already raises PCPS. On sell PC does not change but the number of shares drops, that's why PCPS rises. So aim already has a mechanism to prevent excessive selling. I have not quantified this mechanism yet.

Nevertheless I decrease the selling on a mutual fund in a normal market (slowly rising) by increasing the PC a small percentage of say 4% per year. The goal is to prevent sells in a mutual fund that rises by an expected 10% per year, and delays sellouts.

Adam