Replies to post #16233 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi Neil:

>>>>>I have two stocks at the moment that are in similar state one is down about 70% the other around 50%. On both I am not going to spend any more and am just waiting for the recovery.
<<<<<<<<<<<<

I have had the same thing happen with Meditrust (now La Quinta LQI)

I started buying at 20 in 1998 and bought down to 8 where I ran out of cash to devote to it. Ultimately it went to 1 7/8 recovered to 8 went to 3 and back up to 9. I could not take advantage of that second dip. I am not supposed to sell till it gets to 10 1/5. When it approached 9 last year I sold some shares to take the tax loss and put the money into RMT. I now AIM LQI and RMT as one account. If I have a sale I will sell LQI and if I have a BUY I will buy RMT (diversified small cap fund).

I have pretty much given up on individual stocks and am putting most of my funds into ETFs. There is enough volitility and less risk.

I think we should be happy with 10 to 20% returns instead of trying to chase 50% returns. But that is just my own personality.

I want to buy from the greedy not be the greedy!

Toofuzzy

[lifo]

Hello Neil, yes, I stayed with the stock all the way to the bottom.

My initial purchase was at $14.75 Cdn in June 2000, I ran out of cash at $5.15, and the stock continued dropping all the way to $1.55.

When I ran out of cash, my average cost was somewhere about $10 per share, and, at $1.55, the AIM account was looking very ugly. There were only buys, and the account was showing a huge loss.

After running out of cash at $5.15, I stopped buying, since that's part of the AIM discipline.

However, this AIM account looked so hopeless when the stock was trading near $1.55, I decided to add some new cash and buy lots of shares, which I did at $1.65. That purchase made a big difference in how things turned out.

The stock never got back to my initial purchase price of $14.75. It's now trading at about $10.63. I sold shares along the way, removed all of my original capital, and still have lots of shares worth more than the total amount I put into the AIM account.

When the stock was trading at $1.55, the company had some difficulty "renewing their credit facility", and there was talk of the company filing for bankruptcy protection. If the company had gone bankrupt, then it would have been a very unfortunate AIM experience for me.

Anyway, the real issue with these situations is that, if there are no shares to sell at a LIFO profit, the AIM account becomes inoperable (stuck). So, adding some cash might help salvage some AIM accounts that are under water.

Regards,
Jack