Replies to post #31438 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

Hi LC:

. . . So he changed the rule to only adding half to portfolio control. With that rule the additional investments quickly stopped. He felt it was a acceptably compromise.

Ok, but the fact is still there that one gets residual buy signals which is an illogical advice. One should at least expect to have an algorithm that sets the Advice to zero after a buy. If you set up a portfolio with a large starting value you will get 2 or 3 residual buys is the min. trade os not very large. If one would set the min. buy equal to the first min trade then the buy advice would also go to zero.

My point is (again) not that one can think about all sorts of "tricks" to limit buys or to ignore the residual buy signal. . .one can also decide not to buy ANY shares even if AIM gives a buy signal(called a filter). . .the point is that any advice Generator of an automated Management system should give the sort of advice that is logical and in line with the investor's expectations. If you decide not to act on a buy signal. . . every time. . . you are interfering every time with the system to overrule the Advice Generator. From any point of view that interfering is NOT part of the AIM Algorithm. If that is what you want to do all the time then you might as well call the system MIM. . .Manual Inverstment Management. . . or PIM: Personal Investment Management.

For all those years that AIM has existed newcomers have asked about that illogical Residual Buy time and again because they do not understand it. At least the idea that the residual buy should not be acted upon should be part of the AIM algorithm so hat automatically the Buy Signal=0 after a trade if the price has not changed. As soon as you do this. . and it does not alter the way AIM works. . the Advice Generator gives logical buy signals.

The greatest benefit would be for newcomers to AIM. . .you do not have to time and again, to start up a unnecessary time consuming discussion about doing something illogical because it is supposedly the best thing to do.