Replies to post #40082 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Stocks going to zero is a risk

But a compensated risk!

Typically out of a bunch of perhaps 20 stocks, a few will do exceptionally well; A few totally crash and burn; And a broad average that are pretty flat. Its the few big winners that uplift the whole. Often the biggest winners turn out to be those that dived a lot and then later recovered strongly. Adding to such stocks during ther decline proves to be rewarding.

The trick is not to inject too much into any one single stock, separate cash reserves for each that limit how much is injected into a potential terminal case. Don't use a common cash pool, but separate cash reserves for each AIM. And expect the large majority of individual stocks to perform relatively poorly. More often the stocks that go on to make 1000% or even 10,000% gains are stocks that had previously crashed perhaps 90% down.