A.I.M. Users Bulletin Board

[newbee03]

Hello,

I have a really basic question, which i feel sort of silly asking btu since i am new :), hope i'm excused.

I was trying to explain the AIM methodology to a friend of mine and i showed him the aim buy-sell examples given at Tom's website - http://www.aim-users.com/aimbrief.htm

The first question he asked me, which sort of left me stumped was - AIM is asking you to buy when the stock is going down. This is exactly what leads to you loosing all the money when the stock is coming down from a high (like what happened in the market bust in 2000) - so why would you want to not get out of the position and take you profits or cut your losses, as the situation may be, instead of buying more ??

- Is AIM assuming that we are dealing with good quality stocks which never tank ?
- Does it have a mechanism to sense that a stock is really tanking and it's time to get out while you can ?

Can you help me understand this ? I have read the book although it was a couple of months ago and can't seem to come up with a logical answer..

Thanks,
Satbir