Hi Karw, Too bad those notes don't have dates on them. Looks like both were written before March of 2000. Similar things were written about Mr. Lichello's book in the "Review" section of Amazon.com a while ago.
I can't say that the professional mutual fund managers have done all that well for their customers in the last three years no matter what their style. They've done okay themselves with their fat fees, but now their customers are liquidating putting further pressure on the market price of their securities.
It would appear that the AIMer, Peter Aan, had a better understanding of the market than R.D. Funkhauser when he said, ".....when the inevitable bear market comes (it will come, won't it?) then my allocation will look good, and there will be lots of cash to pick up bargains."
Three things strike me about Richard's comments. First...
"which means that in the declining market you are transferring ever smaller amounts of cash to the purchase of shares -- the values of which are continuing to decline."
This comment shows that he doesn't quite understand the AIM concept because he's thinking in terms of number of shares rather than equity value.
Secondly...
"There will come a time when even the thought of actually doing what may be THEORETICALLY required will make you want to vomit."
That's exactly the time when you need to put your emotions aside and follow AIM's advice. That's exactly the power of any mechanical system, not just AIM.
What Richard is suggesting seems to indicate that he thinks nobody has enough faith in any automated system to follow it during the bad times.
However by not following it, he's actually implying a system is being followed -- that is a gut-feeling, emotion driven system. And following that system is what will cause losses and, in Richard's own words, "drive you from the markets forever." On the other hand, following AIM (and going against your lurching stomach) would make you money when the markets recovered.
And finally...
"I have been in the investment business for more than 40 years and I have yet to find a single individual who completes what they started out to do."
Is he saying that he hasn't completed what he started out to do after 40 years (i.e. he hasn't helped anyone who gave him money to manage or asked his advice)? Or is his statement meant just for everyone else, excluding himself?
Seems to me that Richard is giving misleading advice because he doesn't understand the AIM concept as well as he thinks he does AND his logic is very, very bad.
P.S. I can't help but wonder what Richard's advice would be to someone trying to lose weight. It would probably be something along the lines of, "Well Pete, to accomplish your goal you need to eat sensibly and exercise regularly. However there will come a time when even the thought of actually doing what may be THEORETICALLY required will make you want to vomit... and I have yet to find a single individual who completes what they started out to do." So in Richard's world everyone is fat and eats terribly.
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