Replies to post #42154 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Toof, Re: Math and Quick AIM Calculator...........

If you look at $11.11 and divide it by $9.26 it comes close to a 20% differential even if dividing 9.26 by $11.11 gives you 16.7%.

It somewhat depends upon the minimum order and of what it is a percentage. If 10% of share count, 10% of Portfolio Control (what I use) or 10% of stock value @ suggested buy price.

Remember that sequential buys are affected by the increase in Portfolio Control. PC goes up by 1/2 the value of the buy order. If that order was around 10% then PC increased by 5%. The sequential order is calculated from that higher PC value or around 5%.

With 5% minimum order size, sequential buy drops are around 2.5% of previous orders.

To cover the distance from a recent buy to the "next sell price" you look at the total SAFE range (in this case 10%) and then add to it the minimum trade amount at that next trade price (it's relative to the new PC value). There probably is some whole share rounding going on, too.

AIM is built with a bias to accumulate shares over time. That is because of the increase in Portfolio Control with each buy. You'll note that the value of the remaining shares after that first Sale at $11.11 is almost exactly the Portfolio Control value. AIM caps the value at risk in a rising market at the Portfolio Control value plus whatever Sell SAFE one uses. With zero Sell SAFE, each sale will return residual value back near PC value.

I think this all looks okay.

[SFSecurity]

Hi Toofuzzy, When you say "QUICK AIM CALCULATOR" are you referring to the online calculator at http://web.archive.org/web/20120609073103id_/http://www.aim-users.com/calculator.htm and/or Lou's spreadsheet version of that?

Another question is, is the $10,000 the total spent on shares, i.e. 1000, or is it AIM High with $8,000 in shares and 20%, $2,000 in cash?

BTW, I came up with a sell at $11.12, a penny difference, when I ran it on the spreadsheet. When I ran the initial buy, I didn't get it until $8.33.

Thanks,

Allen

[SFSecurity]

Hi Toofuzzy, I suddenly remember that the way the percentage was calculated in the spreadsheet is not the standard way. We had this discussion a while back where I questioned the percentage calculation method.

What I was taught, for calculating a drop, was to divide the lower price by the upper price. I.e., 8.33/10=0.833 then subtract from 1 to get the percentage drop, like you did, in this case, 16.67%.

The spreadsheet is set up differently and I've never quite figured out what it does or how it does it, I've just adjusted my percentages to get where I want, 20% in actual dollars. In this case to get to an $8.00 buy price I have to use 14.85%. Mostly I just use 15% instead of 10% buy safe.

Interestingly enough Steven R. Selengut says don't buy until there is a 20% drop in price and sell when there is a 10% rise.

Best,

Allen