Replies to post #10914 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hi Leap.

Can you walk us through a series of trades from beginning to end?

The LD-AIM spreadsheet was not built to track or otherwise manage an AIM program. Rather, it was designed to derive the starting points for a 'Low-Down' program that acts like Classic AIM (without the 'core' position Classic AIM requires as a pivot to trade around).

So it cannot be used to 'paper trade'. It wasn't intended to do that.

Using SGA as an example, I started with the following inputs:

Total $ Available: 10,705 (this will be Portfolio Control)
Initial Purchase Price: 17.55 (my entry point).

Sell Side:
# of Transactions: 5
Resistance %(Safe): 5%
Minimum Sell%: 10%
Minimum Sell $: <blank>

Buy Side:
# of Transactions: 3
Resistance %(Safe): 5%
Minimum Buy %: 10%
Minimum Buy $: 1000

So I end up actually buying 250 shares of SGA. The spreadsheet also determined that I need to 'carry' 360 Virtual shares to operate my program. These 360 Virtual Shares represent the 'core' position not purchased.

In addition, I need to set aside $3,018 for Cash Reserve to cover 3 consecutive Buys.

Bottom line here is that I am 'covered' on price appreciation (without an intervening Buy) up to $31.49. The price could also drop to $13.64 (without an intervening Sell) before I run out of cash. I also 'saved' $3300 of that $10705 that could be used for something else. This is a 31% reduction of risk IMO.

On the other hand, if one really wanted to deploy (risk) all $10705, the spreadsheet allows for that via a proportionate increase in the program which in effect 'Fully Leverages' your $. This is simply the reciprocal of the '% Down' value (in this case 1 / .692 = 1.45) applied to the previous Portfolio Control.

You mentioned that...I must be getting dense in my old age and am ashamed to call myself an engineer but I cannot make sense of your spreadsheet although I understand the concept.

This is probably because I am not an engineer! I put the spreadsheet together simply as a means to an end. It took me a few months to accomplish it as well! I make no claims for it other than it works insofar as Low Down AIM has been defined.

I hope this answers your questions.

Regards, Steve

[Adam]

Leap,

If you can use Tom's spreadsheet, I modified it slightly by adding a few columns to do LD AIM. Mainly I add two columns: real shares, and real shares value. It's really easy to use. You put in the total number of shares you want the AIM to use(I call this virtual shares, Steve call it total shares) and the real number. The real number is not used by the program except to keep track for your info.

If your real shares=200 and virtual shares=400 your leverage factor is 2. I may change my terminiology to Steve's because I call the bigger holding virtual, whereas Steve would consider I have 200 virtual shares and 200 real.

In any case the system is very simple and will result in larger trades corresponding to the total(including virtual) holding and should provide increased yield.

If you like I can send you my spreadsheet. I can walk you with it over the phone. My email is [e-mail]

Adam

Adam

[Adam]

Leap,
If you don't like to use a spreadsheet but use some software as Newport, just tell the software you have more shares than you actually own. Carry out the advice of the software and keep track of the actual shares you own separately, and you're off on LD-AIM.

Adam