Replies to post #35712 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

......More on James Stack and his investment ideas:

http://www.forbes.com/sites/gurucentral/2012/04/03/jim-stacks-10-rules-to-safer-more-consistent-stock-profits/

Best regards,

[Adam]

Hi Tom, You were lucky, because 2000 was near a market peak, especially with respect to tech stocks that sank badly. It also somewhat negated what you wrote before about being steadfast in your AIM settings.

I threw that question of narrowing our settings because my trades have been sparse lately and the market seems to be sitting in a narrow range.

But thinking about this one could apply this question also to an individual stock or ETF. If you notice that a stock or ETF is not volatile and not generating trades over some time, regardless of what the general market is doing, why not narrow the hold zone. The worst that will happen is the trades generated will not be optimal, but at least it will turn a situation where the stock is doing nothing and generating nothing, into something.

I still think that especially in a non taxable account it does make sense. If you find the system is generating too many ineffective trades you can always go back and increase the hold zone.

[Conrad]

Hi Tom, you made some valid points!

Your response on the subject of changing AIM settings made me think of earlier discussions I had with you on Control System issues and it reminded me of a control system problem I ran into as a greenhorn engineer in a Proctor & Gamble Pulp Mill in Grande Prairie (Alberta) in 1976. The problem there was caused as a result of not adjusting the settings on a Level Controller. My Short Story on this became a bit too large for directly placing it here. . .I made two 2-bit Short Stories of that experience on how I solved the Control System problem in that mill:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78440453


and

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78440802

Changing settings of a control system has nothing to do with emotion or predicting the future . . it is simply a matter of adaptation of the response for a system that encounters different external disturbances or when the system itself is changing.
As my story demonstrates a system can operate reasonably well with wrong settings, but then it might not operate at its best, and when it encounters a “curve” in the road the “car” will run off the road sooner than when the settings are "perfect". . .To get these perfect settings one has to adjust the settings frequently with changing conditions. . .This is used in some cases, as you know better than most on this forum, with the application of automatic adaptation of the control system parameters in an control algorithm.

Regards,


PS
H.A.L.T. in Holland is an institution that puts people that have been convicted of small crimes to work in community services jobs, without pay:-)