A.I.M. Users Bulletin Board

[AdamH]

Hi Tom, I like the vealie and have used it on AMD in the recent runup. You are right in comparing the vealie with PC adjustment the vealie only kicks on the reaction to the stock. The PC adjustment according to a moving average has a delay of several weeks after the stock or fund takes a turn down.

The other side of the argument is this:

1. with LD AIM one does not hold as many shares and the vealie method kicks in later so the initial sells affect LD AIM more than regular AIM

2. only use a small correction of 4-5% per year. Thus the delay of several weeks before which moving average lags the fund will not cause much increase in PC.

Another reason not to use a large correction is that AIM already is geared to rising stocks: When the stock/fund rises and you sell the PC per share actually already rises, and PC per share is what AIM trades around. If you further increase the PC and the stock takes a turn downward you run the risk of overbuying, and I'd rather take the risk of selling out a rising stock than overbuying a falling stock. That's why any correction to PC should be small.

3. I only use the PC correction on funds that at least have a history of rising.

Adam