Replies to post #25802 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi Neil Reguarding adjusting SAFE on BUYS with LD-AIM


I have also been increasing SAFE on consecutive BUYS with LD-AIM by 5%

BUT ...... On something I have sold out of and made plenty of profit ....... if I am able to get back in I will not bother to increase SAFE. That will hopefully allow me to accumulate a few extra shares to have to sell later.

Toofuzzy

[Adam]

Hi Neil,
<<One thing that may be useful when considering successive buys at lower prices is to look at the price/book ratio.
If the ratio is getting lower you are at least safer as the price approaches the book value.<<

That's a good point about looking at fundamentals, but you really need to do this before you start AIMing a stock. Once the stock drops by a big time you have a big decision tree. Do you continue with AIM hoping the stock will recover, do you just stop and wait, or do you sell out at a loss.

Also, looking a the price/book value may exclude many strong companies. For example AMZN has a ratio of 44, so how do you use this?

Adam