Replies to post #35708 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Conrad

You are on a winding road (to use your analogy) paying LOTS of attention (as well you should) when the road straighten out. It is getting really boring so you close your eyes and just hold the steering wheel real straight (change your AIM settings to meet current market conditions) Guess what, a turn in the road occurs (the market changes in a way the new settings are not designed to optimize)

AIM is designed to handle average market conditions. If you make it too aggressive you either run out of stock or run out of money. If you make it too conservative, trading will grind to a halt. Do you really know when the inflection points in a stocks movement are? Why the heck bother to do anything but time the market (be all in or all out) ?

I will let AIM REACT to market movements instead of trying to predict them. With AIM I do not care which way the market goes, I just react to what happens.

Only a fool or a lier knows which way the market is headed. I am neither even if I am

Toofuzzy

[OldAIMGuy]

Hi Conrad, Re: interesting analogy on making corrective changes....

I very much like the analogy of driving lazy interstate roads vs driving twisty mountain 2 lane roads!

I think part of the problem that Toof is describing is that if we allow emotions to dictate the settings of our business model, we set ourselves up for more emotional changes in the future.

I remember conversations with people during the 2008-09 Panic. They were "afraid" to open their retirement account statements because they didn't want to see how bad things were. If those people were AIM model users, they might still have been "afraid" but would have at least had a plan in place for such a time.

If those people were AIM model users and made radical changes to their usual M.O. and AIM settings during such a panic, it is quite possible they would be doing so with significant emotional influence. That influence might or might not be appropriate as the decisions were being made under duress.

There's an acronym called H.A.L.T. and it is a quick reminder that making significant life decisions should NOT be done when one is Hungry, Angry, Lonely or Tired. It is better to halt the decision process and satisfy the unfavorable condition first. Usually a better decision will be made when the stress of the moment has been relieved.

Sometimes what appears to be an individual's "rising to the occasion" is really that person falling back on their knowledge, experience and training.

Humans do not “rise to the occasion” instead we fall to our level of training and experience  
 Archilochus, Greek soldier and poet 680bc -645bc

In changing AIM model settings our knowledge and experience needs to be the basis of the decisions. Still it remains nearly impossible to predict if the market's next wave will be one of highly volatile times or more complacent times.

Early in 2000 Keith Felkins and I were at the Money Show in Florida. We heard many, many speakers while there. One speaker, James Stack, showed graph after graph of ten separate market measures and how they were well beyond their normal ranges. At that time I went home and changed essentially all of my AIM settings to very defensive positions. I shifted essentially all the SAFE to the Buy side to create a deeper discount to the first buy point. It turned out to be a very good change in tactics. The overall strategy remained in place, but the tactical settings changed. At that point I already had 12 years of AIM experience on which to fall back.

:)
Best regards,