Replies to post #3295 on A.I.M. Users Bulletin Board (AIMUSERS)

[2mc]

Re: automatic parameter settings

Hi Conrad,

I have no problem with automatic parameter settings - ie, settings that change from security to security based on some criteria. I don't consider that parameter tweaking. But, if one arrives at parameter settings via testing (optimization), then I think he sets himself up for great disappointment. Just my view.

Regarding my modification:
I have 2 "disagreements" with standard AIM. (When I say "disagreements" I don't mean to imply that standard AIM is inferior - the bottomline is that AIM works - so I'm all for standard AIM.)

1) I didn't like that it treated Cash as a second class citizen. One of the reasons that rubs me the wrong way is how easily people get confused about 'profit.' I don't care how high a stock goes, until it is sold it does the holder no good whatsoever (apart from dividends). I have friends who at various times tell me how much money they have made in a stock. When I ask them at what price they sold it, they say, "Oh, I haven't sold it yet." Well, then they made -0- as far as I'm concerned. So, cash is a lovely thing - a beautiful thing - a fine thing. In fact, it is the REAL thing. So, I wanted AIM to take that into consideration. My modification addressed this issue.

2) I didn't like the fact that the combo of Portfolio Control and SAFE serve as a proxy for average cost. In reality, average cost can go both up and down - depending on the buys and sells and on how one reckons the transactions: LIFO, FIFO, or average. I wanted to see an AIM-like investment that was based on the average cost and not on a proxy. I wanted to see the average cost go up and down in concert with reality. So, I have another AIM-like investment plan that takes this into consideration as well as treating Cash and stock equally.

Thanks for your comments.

Matt